An interest subsidy scheme was activated for the tea sector this week. This is part of the government aid package for the tea sector where six percent of the interest payment on bank loans, obtained by tea factories will be reimbursed.
“Companies must negotiate the loan interest rates with their banks. Out of that interest, six percent will be reimbursed through the Stabilisation Fund,” said the Chairman of the Sri Lanka Tea Board, Lailith Hettiarachchi.
The scheme was proposed last year to bail out tea factories in a cash crunch because of the impacts of the global financial crisis. However, the proposal was not implemented up to now because the Stabilisation Fund did not have money to finance it. The Treasury has now released around Rs 200 million as initial funds to start the scheme and the Tea Board said more money will be available when needed.
The Tea Board is already processing applications for the reimbursement facility and said some companies have already been notified.
“We have already gone through about 80 applications from companies and the eligible parties have been notified that they can use the facility,” said Mr Hettiarachchi.
Tea Board tea sale
The Tea Board has also sold nearly one million kilos of tea stocks in its position over the last few weeks. The tea was put into the Colombo Tea Auctions in four batches so as not to disrupt market prices.
“We purchased about 916,000 kilos of tea. These stocks were re-sold at the auctions in four lots from the first week of January. The last lot was sold last week. There was no impact on prices because the tea was put into the market in small lots,” said the Director of Promotions at the Sri Lanka Tea Board, Mr Hasitha de Alwis.
This week’s tea prices dropped by a few rupees compared to last weeks average of around Rs 300 per kilo, but the Tea Board said market conditions were good and prices would continue to hold at reasonable levels.
The Tea Board purchased tea stocks in October last year to stop the downward spiral of tea prices in the wake of the global financial crisis. The Tea Board’s intervention helped to contain the price fall and boost market confidence. The New Year started well for the tea industry with prices showing improvements across the board. |
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