Colombo share prices are not reflecting the profits of plantation companies, raising questions about the plantation bubble bursting all too soon. "The results of the plantation companies are very good, but their respective share price reaction has not rocketed skywards. This may be because investors in these firms are cautious of the future of these companies," a broker noted.

He said that the rubber prices have dropped for the past six weeks and the primary reason for this is the weakness in crude oil prices. “In the future, the rubber prices may decline further as the crude oil prices are on the slide," he noted.

However he said the June results of companies are coming in and firms which have rubber and low grown teas will have better results, because both tea and rubber prices were high during the March to June period.

However stock market analysts said when working out the profitability of plantation firms considering the Net Sales Average (NSA) is just one part. "You need to consider the cost of production as well. This varies from each firm and also the management fee component needs to be considered," he said.

He also noted that investors had already priced in the good results of plantation firms when they invested a few months ago in the plantation shares, when the stock market saw plantation stocks climb high. "The volatility in this sector is very high," he added.

But stock brokers said that there are many plantation stocks that are trading at a discount. "There should be some improvement in the plantation shares during the next few months, as there is great potential in this sector," a stock broker said.

"But the plantation shares have to trade at a discount, because there are so many wild cards and so many issues that are not within your control," he said. A tea industry analyst said that for the next year, tea prices will hold, backed by the crop shortfall in a large tea producing country, Kenya. "The African region is doing poorly with tea production.

Also the marketable surplus tea has declined in China and India, which are two of the largest producers," he said, explaining that these two reasons have bought the global tea production to a tight supply situation."In the local content, 50 percent of our teas go to the Middle East. Their buying power is very high at present. That is part of the reason that tea plantations are doing well," he said..