However what surfaced was that good tea would sell. Kudos to Brokers and Regional Plantation Companies (RPCs). Brokers because they have been consistent in their reports that standards should be maintained. One other point of interest was that in times of strife they have always been an escape bung to prop small timers from sinking to penury. Including the Private Tea Factory Owners. What happened this time was beyond their grasp because Banks stopped credit.
Chairman Colombo Brokers Association Sarath Sirisena said they had always insisted that standards should be maintained and good tea would sell. This happened last week. Western high growns, and Nuwara Eliyas had a good run, particularly because RPCs adhered to standards and thanks to good management their teas sold at good prices.
Index that hard work could not be replaced. To make a good cuppa meant extremely hard work, said Sirisena.
Although we also spoke to plantation sources they said, and they said at this point,
‘Don’t quote me’, that hype built up through some media sources that Presidential intervention would see the industry back on its feet has not materialized. The Central Bank and the Treasury are still at the talking stage with nothing tangible forthcoming.
A sum of Rs. 5 billion was promised by the President but both entities have not worked out modalities for lending and recovery.
We said in our previous report the tea industry did not need bail out funds, but such funds would need to be lent for repayment within given time.
Somebody within upper echelons of both the Central Bank, and The treasury, have not fully grasped what was intended and they are still holding out.
The question now at the top of the paper for ‘discussion’, is who is disobeying whom?
As for standards the RPCs have always had their management indices well in control and more importantly adhered to those practices.
We did not talk to the Colombo Tea Traders Association, or the now moribund Tea Association of Sri Lanka (TASL) ( The hyped body to over see the entire tea industry). Because invariably the latter did not want to be quoted.
Least that could be expected was that there was some stability that could be expected. ‘Some’ was more the expected norm. Low growns did register one or two invoices that registered good prices, But those were just flashes in the pan, Brokers said.
How does one get out of this mess? Nobody seemed to know the answer to that question.
At prices ranging from Rs 285 to Rs 320. the question now at RPC level is their reserves are running out, and out come of the cash crunch will be a telling factor in their routine management. Would Banks rescue them, or insist on their pound of flesh?
For the record Banking in this country have always taken the ‘Shylock’ factor into consideration. And not moved forward to itemize their outlook to include bold banking techniques. Such is what the Tea industry is faced with.
Approximately 6.4 million Kilos were on offer this week. The cash crunch also had its telling effect on production. To end September 2007, total production was at 219.43 million but this year the same period, production at 248.39 million was about 28 million ahead, but production figures for September were not encouraging September produced 25.21 million kilos, but last year September being a poor year produces 25.35 million kilos.
That is necessarily the bottom line.