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Tea auction prices reach historic milestone 

02 May 2022

  • Surpasses Rs. 1,500/- per kg for the first time in 127 years
  • Tea Trader Association attributes victory to increased demand, depreciating rupee
  • Prices were at Rs. 662 per kg in January
  By Shenal Fernando The average price of a kilogramme of tea auctioned at the Colombo Tea Auction on 26-27 April 2022 surpassed Rs. 1,500 for the first time in its 127-year history. Speaking to The Morning Business, Colombo Tea Trader Association (CTTA) Chairman Jayantha Karunaratne stated that the average price of tea sold at Sale No. 16 held on 26-27 April was Rs. 1,512.8, which represents a Rs. 142.3 (10.3%) increase compared to the previous auction (Sale No.15) held on 19-20 April 2022, at which the average price was Rs. 1,370.5. “We have achieved a record average price at the Colombo Tea Auction, where it has never reached these Rs. 1,500 per kg price levels of tea. Increased demand, Sri Lankan Rupee depreciation and shortage of tea have played a part in reaching these record price levels," stated the CTTA Chairman. Explaining further, he stated that at the beginning of the year, the average price of tea sold at Sale No. 1 held on 5 January 2022 was around Rs. 662. Therefore, the average price of tea sold at the Colombo Tea Auction has increased by over 140% during 2022. The Colombo Tea Auction, which is conducted by the CTTA, is known for maintaining the highest average price for tea in comparison with all other global tea auction centres. Since the outbreak of the Covid-19 pandemic, the Colombo Tea Auction has been conducted through an online platform. There is hope that this drastic increase in Sri Lanka tea prices will offset any loss revenue caused by the decrease in crop volumes following the fertiliser crisis in 2021. In early April 2022, the Sri Lanka Tea Exporters’ Association said that they were grappling with a number of internal and external issues such as low tea crops, high cost of production, fuel issues, sanctions on Russia, high freight rates, etc., and were concerned about the possible loss of market share for Ceylon tea if corrective measures were not taken immediately.  As per the tea quantities offered at the Colombo Tea Auction during March 2022, they said that it was estimated that the tea crop in Q1 would be in the range of 65 million kg – a drop of about 10% compared to last year. The Association said that although tea planting season had begun with the onset of rain, fertiliser was not available in sufficient quantities for tea growers. Further, the price of fertiliser had increased almost fourfold, rendering it unaffordable for many tea producers. “Since tea export volumes are directly related to the available tea crop, the tea export volume is also estimated to be lower by about 8-10% in Q1 of the year,” the statement said.  


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