Sri Lankan plainer teas see shrinking demand

COLOMBO (EconomyNext) – Demand is falling for Sri Lankan average quality teas as cheaper substitutes can be found in other origins, resulting in a growing volume of unsold lots, brokers have warned.

The price gap between high quality and plainer teas is widening at the auction in Colombo, they said.

"We are witnessing a fall for the average quality teas as well as for plainer teas," brokers John Keells said.
"This trend is to continue as the offer quantities increase and the world prices for comparable teas or substitutes continue to be much lower than the Colombo auction prices."

Industry officials have been warning that although high prices at the Colombo auctions are good for growers they might deter overseas buyers, forcing them to look for cheaper alternatives.

At this week’s auctions, the 1.3 million kilos of teas from plantation company estates "met with very little demand," the brokers said. "A high volume of tea remained unsold."

Western BOP type teas fell sharply following quality and less air mail bids while BOPFs fell 20 – 30 rupees and at times even more.

But John Keells said a "bright feature" was that good liquoring teas continue to receive special inquiry.

Sri Lanka’s tea crop rose 13 percent in February to 25.6 million kilos from a year ago.






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