Sri Lanka low-grown tea prices gain in June third week sale

ECONOMYNEXT – Sri Lanka’s low-grown Ceylon teas prices rises to 1,447.39 rupees a kilogram in June third week auction, from the previous week’s 1,455 rupees a kilogram, industry data showed, as the currency continuse to depreciate.

In the last week’s auction sale on June 22 low grown averaged 4.05 dollars a kilogram up from 2.92 dollars a year earlier. Global commodity prices have moved up due to US money printing, which tends to weaken the dollar.

At June 22 auction Low Grown BOP1 grade from Pothotuwa estate fetched 4,300 rupees a kilogram and Pothotuwa OP1 fetched 4,250 rupees a kilo, Ceylon Tea Brokers data showed.

The Premium Flowery grades – FBOPFSp of Alhewana Super estate has fetched 10,500 rupees a kilogram and while Kamarangapitiya estate’s FBOPFExSP1 had fetched 10,000 rupees per kilogram.

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.

In US dollar terms the national sale average on June 22 was 3.52 dollars a kilogram compared to 2.92 last year.

At the June 22 sale auction, Low Grown had good demand and Ex-Estate had strong demand, Ceylon Tea Brokers, a Colombo-based tea brokerage said.

Low Grown leafy/Tippy variety had seen an increased demand selling 2.26 million kilograms compared to 2.4 million kilograms in the previous week.

The Ex-Estate has sold 0.67 million kg last week compared to 0.8 million kg in the previous week.