Tea prices in Sri Lanka fall by 18 per cent in 2023 I Sri Lanka Latest News

Sri Lanka tea prices fell 18 percent over 2023, with the auction average falling to 1,186.41 rupees at the last auction December 2023, 1,186.41 rupees, a year ago, according to industry data.

Sri Lanka gets the highest prices for low grown teas, which are exported to the Middle East and the lowest prices for high grown teas.

High Growns fell to 1,071.97 a kilogram from 1,359.78.

Medium Growns fell to 1,019.03 form 1,237.86 rupees.

Low Growns fell to,278.08 from 1,534.27 rupees.

In US dollar terms, average tea prices fell from 4.0 US dollars a kilogram to 3.63 US dollars or down 9.25 percent.

Prices in rupee terms fell partly due to an appreciation of the currency from 360 to 330 to the US dollar following better monetary policy and deflationary open market operations.

An appreciation of the currency also reduces food and other prices (monetary inflation) helping workers and reduce the tendency for workers to strike and also bring down energy prices.

The US dollar price tea generally falls when the US Federal Reserve tightens monetary policy strengthening the US dollar against commodities including wheat and fuel.

The action also reduces social unrest and strikes. Sri Lanka’s central bank however busted the currency from 200 to 360 in 2022 after printing money for two years to target short term rates and try to push up growth (targeting potential output).

Source : Econonmy Next

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