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The drastic fall in local tea and rubber prices - which has led to major losses for regional plantation companies - is part of a broader global trend of declining commodity prices, which is not expected to reverse in the near future, a media release from the Planters' Association of Ceylon said.
The Association represents 22 regional plantation companies (RPCs) collectively employing nearly 200,000 workers.
Prices are depressed at present due to external reasons and global forecasts reflect a bleak future in the medium term for commodity prices in general. In its 'Commodity Market Outlook' earlier this year, the World Bank forecast a decline in all nine key commodity price indices in 2015.
The report said, "By 2016, a recovery in the prices of some commodities will be under way, although the increases will be small compared to the depths already reached." Indicating a prolonged slump.
The report indicates that prices of agricultural raw materials which fell by more than 35% between early 2011 and the end of 2014 will continue to contract this year.
Similar to other commodities, prices of tea and rubber have dropped substantially in the world market. According to World Bank data, on average the global price of tea in 2014 was only US$ 2.72 - which is lower than in 2013 and 2012 - during which prices were US$ 2.86 and US$ 2.9.
Due to other reasons such as turmoil in key export markets including Russia and the Middle East, the price of Ceylon Tea has dipped more sharply. By the first week of April 2015 (on a 'to-date' basis) the average price of tea was Rs. 66 (or 13.7%) less than it was a year before at the Colombo Tea Auction.
Courtesy : The Sunday Observer 10 My 2015
