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Tuesday May 28th, 2024

Sri Lanka’s Ceylon Tea prices extend losses

ECONOMYNEXT – Sri Lanka’s tea prices fell across elevations with prices down 50 to 100 rupees a kilogram with November second week sale, extending falls from a week earlier.

November first week sales with low grown teas slipped 167 rupees per kilogram to 1,408.85 rupees a kilogram, from the previous week, Ceylon Tea Brokers data showed.

In the second week of November, low grown averaged at 3.88 dollars a kilogram down from 4.17 a week earlier.

Global prices also go up in dollar terms (commodity booms) when the US Federal Reserve prints money. However the Federal Reserve has now started to raise rates which tends to bring commodity prices down. Coffee prices fell earlier.

In the November 5th auction, the Low Grown leafy/Tippy variety had seen a drop in demand selling only 2.2 million kilograms.

The Ceylon Tea Brokers auction statement shows that tea prices across all elevations have fallen between 50 to 100 rupees.

Low Grown attract the highest prices for Ceylon Tea.

In the November 2nd week auction, the Low Grown Tea sale average was 1,408.85 rupees, down from 1,516.83 rupees in the previous week.

In dollar terms, it had slipped to 3.88 dollars per kilogram, from 4.17 dollars in the previous week.

Select best BOP1s declined, whilst best and below best were irregularly lower. Poorer types maintained.

OP1 Select best together with best and below best declined. Poorer sorts were fully firm.

PEKOE/PEKOE1’s Select best teas together with full range of bold PEKs were fully firm. Cleaner below best and the rest were irregular.

FBOP/FBOP1’s Except for a few select best invoices all others had a lower market.

BOP’s few well-made invoices held firm whilst all others were lower.

FBOPF/FBOPF1’s Select best and best shed in value, whilst the below best and bottom had a sharp

High Grown

The High Grown auction average was 1,366.32, down from 1,429.77 rupees.

BOP’s Best Westerns few select invoices were firm whilst others declined by Rs.50/- per kg.

Teas at the below best shed by Rs. 40-80/- per kg.

Plainer teas were firm to easier by Rs. 50/- per kg. Nuwara Eliya’s were irregular and mostly easier.

Uda Pussellawa’s were lower by Rs. 100/- per kg whilst Uva’s lost by Rs. 50/- per kg.

BOPF’s Best Westerns few select invoices were firm whilst others easier by Rs.50/- per kg.

Below best and plainer teas declined by Rs. 50-100/- per kg.

Nuwara Eliya’s had hardly any offerings. Uda Pussellawa’s
shed by Rs. 50/- per kg whilst Uva’s were lower by Rs. 50-100/- per kg.

Medium Grown

The Medium Grown auction average for the week was 1,366.32 rupees down from 1,429.77 rupees a week before.

Last week, BOPF’s Cleaner types maintained whilst all others declined by 50 rupees per kg

In BOP1, Select best and best declined by Rs.50/- per kg, whilst all others were firm.

While Select best easier by Rs.100/- per kg. Best lower by Rs.50/- per kg whilst all others maintained.

OP/OPA’s Select best lower by Rs.100/- per kg. Best and the Below best shed by Rs.50/- per kg whilst the teas at
the lower end maintained.

In the PEKOE/PEKOE1 – PEK Select best declined by Rs. 50/- per kg whilst all others were firm.

PEK1 in general, firm.

FBOP’s Select best and best declined by Rs.100/- per kg whilst all others shed by Rs. 50/- per kg.

FBOPF1’s Select best were lower by Rs.50/- per kg whilst best declined by Rs.100/- per kg.

Below best eased by Rs.50/- per kg. Teas at the poorer sorts were firm.


High-grown BP1s had hardly any offerings while PF1 eased by Rs. 50-100/- per kg.

Mid-grown BP1s were irregular and PF1 declined by Rs.100 per kg.

Low-grown BPIs hardly any offering and PF1 declined Rs.100-200 per kg.

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Sri Lanka president’s UNP proposes postponing elections by two years

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — Sri Lanka’s United National Party (UNP) has called for a referendum to postpone both presidential and parliamentary elections by two years to extend President Ranil Wickremesinghe’s term to continue ongoing economic reforms.

UNP general secretary Palitha Range Bandara called on the main opposition Samagi Jana Balawegaya (SJB) and the leftist opposition formation National People’s Power (NPP) to support the move.

At a press conference on Tuesday May 28, Bandara said postponing the two elections would not be undemocratic as it would be the result of elected representatives in parliament passing a motion, followed by a referendum.

Defending the proposal, he recalled the controversial decision by then Prime Minister Sirimavo Bandaranaike to postpone elections in the 1970s, which resulted in the decimation of her Sri Lanka Freedom Party (SLFP)-led alliance.

Bandara said that all parties must understand that now is not the time for elections as the economy has yet to emerge from bankruptcy and that President Wickremesinghe must be permitted to carry out his reforms which have already brought stability.

The UNP’s latest statement is a far cry from its pronouncements as recently as last weekend that the presidential election would definitely be held between September 17 and October 18 this year, followed by the parliamentary elections in early 2025.

UNP spokesmen also boasted that Wickremesinghe would not only contest the presidential poll but would also win it.

Tourism and Sports Minister Harin Fernando told reporters that Wickremesinghe would definitely contest the election, in response to some speculation that the president may opt to sit out.

“I think President Wickremesinghewill himself reveal his plans next week or one of these days,” said Fernando.

“He will definitely contest. I said he would for sure. Not only will he contest, he will also win,” he added.

Labour Minister Manusha Nanayakkara concurred.

“President Wickremesinghe will definitely win the election,” he said, adding that the president has provided much relief and that the economy continues to recover having fallen to its lowest point. (Colombo/May28/2024)

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Sri Lanka reforms have started to yield positive outcomes: State minister

ECONOMYNEXT – Sri Lanka’s State Minister of Finance Shehan Semasinghe says reforms have lead to positive incomes, including an increase in reserves.

“The reforms have started to yield positive outcomes, reflecting significant progress in multiple areas. Sri Lanka’s gross official reserves have seen a significant increase, reaching USD 5.5 billion by the end of April 2024,” Semasinghe said on social media platform X (twitter).

“Additionally, the Sri Lankan rupee has appreciated by approximately 8 % against the US dollar so far in 2024. This will boosts investor confidence and enhances the country’s ability to manage external shocks and meet international obligations and enhance confidence on the economy.

“The appreciation of the rupee can help lower inflation and reduce the overall cost of living and make it easier for the government and businesses to service foreign debt, thereby improving our financial reputation globally. Further, will improve the trade balance by potentially reducing the trade deficit.”

Sri Lanka’s inflation was 1.5 percent in the 12-months to April 2024, measured by the widely watched Colombo Consumer Price Index, data from the state debt office showed.

The CCPI Index fell 0.8 percent, to 195.2 points in the month of April after falling 1.9 percent in March.

Sri Lanka’s central bank has been operating largely deflationary policy, since September 2022, except perhaps in December 2023, and also allowed the rupee to appreciate in the balance of payments surplus it created.(Colombo/May28/2024)

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Sri Lanka risks foreign retaliation over VFS visa deal

ECONOMYNEXT – The Maldives could take reciprocal action after Sri Lanka’s new system of outsourcing its visas, which requires the payment of “processing” and “convenience” charges of 26 dollars, even though the government does not collect any fees.

Maldivian authorities have reminded Sri Lanka of the long-standing bilateral agreement under which their citizens could travel freely between the two neighbours without any charges or bureaucratic barriers.

A one month stay is available without a fee.

Maldivians, who consider Sri Lanka their second home, often spend more than a month in the larger country, but are now required to pay 26 dollars to VFS Global, which has controversially been contracted to handle Sri Lankan visas.

“The Sri Lankan government will not charge a fee, but Maldivians still have to pay VFS after applying online for a visa,” a Maldivian government official said in the capital, Male. “This violates the spirit of our agreement.”

He said the new administration of President Mohamed Muizzu was taking up the issue with Sri Lankan authorities in both Male and Colombo.

In a worst-case scenario, the Maldives will be compelled to reciprocate the new cost of a Sri Lankan visa and charge Sri Lankans traveling to the archipelago. There are also expat Sri Lankans in the Maldives.

There are only a handful of countries to which Sri Lankan passport holders can travel without any visa restrictions.

Singapore is another country which could take action against Sri Lanka if the bilateral deal is found to be violated, according a source said.

Opposition parties have said in parliament that outsourcing the visa handling to VFS Global and their partners was a bigger corruption scandal than the bond scam of 2015 and 2016, when billions of rupees were stolen through insider deals. (COLOMBO/May 28, 2024)

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