Lanka tea prices inflate sharply

COLOMBO: Sri Lanka’s tea prices which inflated sharply in which soared in rupee terms after the collapse of soft peg with the US dollar, continue to attract good prices, market data showed.

Prices rose sharply in May but eased somewhat toward the end of the month.In rupee terms the national average which was 692 rupees at the end of January 2022 rose to 1362 rupees after the currency collapse.

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 goes up when the central bank prints money to depreciate the currency.

Global prices also go up in dollars 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 May 31 was 3.6 dollars a kilogram compared to 3.18 last year.

At the May 4th sale auction during May 31-June 01, high grown gained, Ceylon Tea Brokers, a Colombo-based tea brokerage said.

High grown ex-Estate, had seen an increased demand selling 1 million kilograms whereas in the previous week it had sold only 0.94 million kilograms.

Low grown leafy or tippy variety, another top seller however had seen a drop in demand selling only 6.7 million kilograms compared to 6.42 million kilograms in the previous week.