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All have now settled down prices continue good news trends

Plantation turbulence has now abated. The Estates, Tea Trade, Unions, Ministers, are now, hopefully, at their desks and dealing with hum drum routine functions. Tea picked up last week; quite against the grain that the industry was done for; when sold produce was blocked form arriving at Colombo go – downs.

Effectively the Thondaman factor prevailed and normalcy restored. Workers gained from the wage package, so too plantation companies. But other unions smarting behind the hackneyed term ‘cheated behind our backs’, have threatened to launch their specialized campaign after the Dheepavali holidays. They seemed serious when they addressed the press recently.

As conceded by the Employers’ Federation of Ceylon the agreement also included an important clause conditioned to relate to productivity. In their assessment it was a land mark event in plantation industrial relations and maybe linked to future negotiations bound to occur at cessation of this agreement.

Good news was that last week the market moved ahead and all indicators point to sustained improvement as the ensuing weeks unfold. Director, Ceylon Tea Brokers Ltd., Russel Tennekoon said winter buying has already commenced and unless some catastrophe strikes buyers would continue to fill their orders till the holidays this Christmas. All told he said good news would continue.

Effective first week December the Western quality season would be upon us and that too augers well for the industry. Subject to increased crop intakes things don’t seem too bad, he said.

Meanwhile latest production figures end August continue to relate a dismal story. Cumulative production end August this year was 181.9 million kilos. Last year (2008) same period recorded 223.8 million kilos. Industry sources said there was no hope to recoup this deficit. At Estate level crop losses have had negative impact on returns. Apart from one or two companies who adhered to basics last year, all others will record losses. ‘2009, at best should be forgotten. Sooner the better’. These sources said.

Meanwhile Asia Siyaka weekly tea market report said there have been interesting phenomena brewing in the tea world.

Global inventories have depleted following crop failure in major tea exporting countries. Droughts in India, Sri Lanka, and Kenya, exacerbated an already hopeless situation. However depleted inventories would boost prices. Effective early 2010,best-on- record- prices could be expected, said the Indian based Company, McLeod Russel. This view is shared by others in international locations. Assuming crop returns too would record increases the coming year would be an expected good year. At least those were speculative remarks from the same source.

Demand remained strong. Irrespective of global economic down turn. Retailers say consumers treat tea as an essential they are not willing to curt back on.

This forecast comes on heels of record prices at auctions in Mombasa, Kenya.

Best quality tea prices rose last wek to $3.97 up 36 percent from January this year.

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