Sri Lanka tea sees improved demand for low growns at auction

Mar 31, 2016 (LBO) – Sri Lanka’s tea prices in overall auction offerings this week were marginally lower with better demand for low grown and mid to high grown prices easier, Forbes & Walker Tea Brokers said in their latest report.

“Low Growns continued to witness improved demand all around and consequently an appreciation in prices,”  the report said.

“High and Medium Grown seasonal teas were lower following quality whilst prices at the lower end were dearer around.”

All elevations have shown a decline in production for the month vis-à-vis February 2015.

“Consequent to the extreme dry weather conditions experienced throughout the island over the past several weeks have resulted in the Auction quantities from now on to show a steady decline.”

The full statement for 29th/30th auction follows;

The total quantity on offer declined to a 5.9M/kgs. Low Growns continued to witness improved demand all around and consequently an appreciation in prices. High and Medium Grown seasonal teas were lower following quality whilst prices at the lower end were dearer around.

Ex-Estate offerings totalled a 1.0M/kgs. Seasonal quality Western’s together with Nuwara Eliya’s showed a general decline whilst the others together with Uva/Udapussellawa’s were similar to last. Best Western BOP’s were mostly easier. Corresponding BOPF’s – coloury sorts sold around last week’s levels whilst the lighter liquoring teas declined sharply following quality.

BOP’s in the below best category were irregular whilst the plainer BOP’s were firm and Rs. 5-10/- per kg dearer. Corresponding BOPF’s gained Rs. 10/- per kg and more on select invoices. Nuwara Eliya’s were all around lower following quality. Uva/Udapussellawa’s mostly sold around last week’s levels whilst a few select invoices gained up to Rs. 10/- per kg following special inquiry.

High and Medium Grown CTC BP1’s were firm. Corresponding PF1’s – better sorts were Rs. 10/- per kg dearer whilst the others were barely steady. Low Grown BP1’s declined up to Rs. 20/- per kg whilst the corresponding PF1’s declined Rs. 10/- per kg on average. Liquoring leafy teas met with much less demand with prices for most teas ranging from Rs. 450-550/- per kg and only a few select invoices appreciating further.

There was less demand from the UK, the Continent, Japan and South Africa whilst there was reasonable buying interest from shippers to CIS and Middle East.

Low Growns comprised of approximately 2.7M/kgs in the Leafy/ Tippy catalogues, a slightly smaller quantity compared to the preceding sale. Consequent to the low volumes on offer there was good demand all-round. In the Leafy catalogue BOP1/OP1’s gained Rs.10-15/- per kg and substantially more for the improved sorts. OP/OPA’s too were fully firm to dearer with teas at the lower end gaining Rs.10-15/- per kg and more at times. PEK/PEK1’s too were fully firm to dearer.

Here again the bolder types gained Rs. 10-20/- per kg. In the Tippy catalogue FBOP’s gained Rs.10-20/- per kg whilst better FF1’s were fully firm. However, at the lower end prices gained Rs.10-15/- per kg and more. In the Premium catalogue too prices were fully firm to selectively dearer. Shippers to CIS, Turkey, Dubai, Iraq, Saudi Arabia and Kuwait were active this week.

Consequent to the extreme dry weather conditions experienced throughout the island over the past several weeks have resulted in the Auction quantities from now on to show a steady decline with offerings for sale no. 15 scheduled for 18th/19th April 2016 totalling a 4.9M/kgs.

Sri Lanka Tea Production – February 2016

Tea production for the month of February 2016 totalled 22.9M/kgs vis-à-vis 25.4M/kgs of February 2015 showing a decrease of 2.5M/kgs. All elevations have shown a decline in production for the month vis-à-vis February 2015.

January – February 2016 cumulative production too of 48.06M/kgs show a decrease of 0.6M/kgs vis-à-vis 48.7M/kgs of January – February 2015. On a cumulative basis Low Grown production has remained static whilst High/Medium Growns have shown a decrease to the corresponding period of 2015.

February CTC production too of 1.45M/kgs show a marginal decrease of 0.04M/kgs compared to 1.49M/kgs of 2015. Hereagain all elevations show a decline in production vis-à-vis 2015. On a cumulative basis too January – February production of 2.9M/kgs show a marginal variance vis-à-vis 3.09M/kgs of January – February 2015. Low Growns show a growth YOY in production whilst High/ Mediums have shown a decrease.