ECONOMYNEXT – Sri Lanka’s tea have been sold at the highest price ever across all elevations in July 2022 selling at an average of 1,448.13 rupees per kilogram compared to 588.92 rupees in the same period the previous year, as the currency collapsed steeply following mistargeted interest rates while the global tea prices shot up.
July prices surpassed the previous record price reported in April 2022 of 1,333.61 (USD 4.14).
In dollar terms, the average sale price for Sri Lankan tea had been 4.01 dollars per kilogram
Elevation-wise, the low-priced High Growns had been sold at an average of 1,204.57 rupees against 548.59 rupees
(an increase of 655.98)compared to last year, Ceylon Tea brokers’ data showed.
Medium Growns recorded 1,152.29 rupees from 522.77 rupees (up 629.52 rupees) in 2021.
Low Growns achieved 1,608.57 rupees in July 2022, up from 625.08 rupees (up. 983.49) in the previous year.
Global commodity prices have moved up due to US money printing, which tends to weaken the dollar.
In Sri Lanka Mercantilists and soft-peggers usually claim that inflation comes from imported prices. However, prices of all traded goods, whether imported or exported go up when the central bank prints money to depreciate the currency.
Global prices also go up in dollar terms (commodity booms) when the US Federal Reserve prints money. At the moment commodity prices are booming due to the so-called ‘Powell Bubble’ the worst since the Greenspan-Bernanke bubble which broke in 2008/2009. (Colombo/Aug14/2022)