Hot demand boosted the price of Sri Lankan low-grown teas at the latest auction, but high-grown varieties declined following a string of strong sales, brokers said on Thursday.
The estimated gross sales average from the auction on Tuesday and Wednesday was 180 rupees ($1.73) per kg, marginally above the 179.64 rupee average last week, Forbes and Walker Tea Brokers said in a statement.
Broken Orange Pekoes (Bops) from the high-altitude Newer Ely region lost as much as 30 rupees per kg and some teas from the region went unsold. Those from the Western region sold 10-15 rupees per kg lower.
"Prices (for high-growns) went up too much last week, so I think we're seeing a slight correction, but I don't think they'll slide too much from here," said Dylan Polonowita, a broker at Forbes and Walker.
Teas from the Uva region were the bright spot among high-grownups, with Bops and Broken Orange Pekoe Fanning gaining five to eight rupees, due to good quality. Low-grown teas fared well across the board, with Middle Eastern markets especially active ahead of the Muslim holy month of Ramazan, which will begin in October.
Flowery Bop's gained eight to 10 rupees, and tipsy teas also saw good demand. Polonowita said the low-grown market had been especially strong this season, benefiting from tariff liberalisation's in Iran that boosted the market, but he cautioned the high prices might not last.
"The market is a little overheated. Prices are too good to be true, and they could ease in the next couple of weeks," he said. There were 5.6 million kegs of tea on offer at this week's auction and 5.5 million KGs will come under the hammer at next week's sale.
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