Weather to impact Sri Lanka’s tea output in 2016: report

lanka-tea-estate

Aug 26, 2016 (LBO) – The impact of extreme weather conditions continues to take its toll on Sri Lanka’s tea crop which is now clearly poised to show a significant negative variance over last year, Forbes & Walker Tea Brokers said in their latest report.

“The 33rd sale which concluded had on offer 5.3M/kgs. In contrast, the corresponding sale last year had on offer a quantity of 7.7M/kgs,” the report said.

With regard to price BOP’s in the below best category were firm whilst the corresponding BOPF’s tend to fluctuate following quality.

“Plainer BOP’s which commenced firm gained Rs. 10-20/- per kg as the sale progressed whilst the corresponding BOPF’s were firm.”

Tea exports for the month of July 2016 totalled 25.7M/kgs showing a decrease of 3M/kgs vis-à-vis 28.7M/kgs of July 2015. All Main categories of exports i.e bulk tea, packeted tea and tea bags have shown a decline YOY.

When analyzing the major importers Iraq has retained the no.1 position followed by Russia and Iran. It is also noteworthy that Iranian imports have shown a significant growth in 2016 vis-à-vis 2015.

Turkey and U.A.E have retained the 04th and 05th positions in 2016 although YOY imports have shown a fairly significant decrease compared to the same period of 2015. Meanwhile Kuwait too for the period January – July 2016 have shown a fairly substantial decrease in imports vis-à-vis January – July 2015.

The full report follows:

The 33rd sale which concluded today had on offer a 5.3M/kgs. In contrast, the corresponding sale last year had on offer a quantity of 7.7M/kgs. The impact of extreme weather conditions continues to take its toll on Sri Lanka’s tea crop which is now clearly poised to show a significant negative variance over last year.

Ex-Estate offerings were similar to last and totalled a 0.8M/kgs. Overall quality of teas from the Western Planting districts showed no change whilst Nuwara Eliya’s comprised of a small selection of improved teas. Udapussellawa’s were mostly lower to last. A small selection of Uva’s had fair seasonal quality whilst the others were similar to last.

Best Western BOP’s where quality was maintained were firm and Rs. 10-20/- per kg dearer whilst the others were irregular and Rs. 10/- per kg easier. Corresponding BOPF’s where quality was maintained were barely steady whilst the others tended easier. BOP’s in the below best category were firm whilst the corresponding BOPF’s tend to fluctuate following quality. Plainer BOP’s which commenced firm gained Rs. 10-20/- per kg as the sale progressed whilst the corresponding BOPF’s were firm. Nuwara Eliya BOP’s where improved were substantially dearer whilst the corresponding BOPF’s were up to Rs. 10/- per kg dearer. However, the poorer sorts were neglected. Udapussellawa’s were irregular and often lower following quality. Uva seasonal teas were irregular following quality whilst the other BOP/BOPF’s were firm and up to Rs. 10/- per kg easier. CTC BP1’s on average were Rs. 10/- per kg easier whilst the PF1’s were sold around last week’s levels.

There was far demand from shippers to the CIS whilst the other markets continued to be selective.

Low Growns totalled 2.4M/kgs in the Leafy/ Tippy catalogues. There was good demand all round. In the Leafy catalogue OP1/BOP1’s gained Rs.10-15/- per kg and more, particularly for the improved/ below best. Better OP/OPA’s too were fully firm to Rs.10/- per kg dearer. At the lower end too prices were fully firm. Better PEK1’s gained substantially whilst others and the better PEK’s too were dearer but to a lesser extent. In the Tippy catalogue select best FBOP’s maintained whilst others and FF1’s gained. At the lower end too prices gained Rs.10-15/- per kg and more for the cleaner sorts. In the Premium catalogue a selection of small leaf teas gained on last whilst balance sold around last levels. At this week’s sale shippers to CIS, Dubai, Turkey, Iraq and Saudi Arabia were active.

Sri Lanka Tea Exports July 2016
July FOB Value Up – Rs.20.77 per kg YOY
January / July Volume Down – 8.1M/kgs YOY

Tea exports for the month of July 2016 totalled 25.7M/kgs showing a decrease of 3M/kgs vis-à-vis 28.7M/kgs of July 2015. All Main categories of exports i.e bulk tea, packeted tea and tea bags have shown a decline YOY. Total revenue realized too of Rs.15.6B show a decrease of Rs.1.3B vis-à-vis Rs.16.9B of July 2015. However the average FOB value per kg of Rs.609.33 for July shows a gain of Rs.20.77 when compared to Rs.588.56 of July 2015.

January – July cumulative exports for 2016 of 172.1M/kgs too show a decrease of 8.1M/kgs vis-à-vis 180.2M/kgs of January – July 2015. When analyzing the relevant categories tea bags have shown a growth YOY whilst packeted tea and bulk tea show a decrease. Total revenue realized for the period of January – July 2016 of Rs.104.9B too, show a deficit of Rs.2.7B vis-à-vis Rs.107.6B realized during the same period of 2015. Here again the average FOB unit value per kg of Rs.609.80 for the period show a gain of Rs12.44 vis-à-vis Rs.597.36 of the same period of 2015. (As detailed in page no.08)

When analyzing the major importers Iraq has retained the no.1 position followed by Russia and Iran. It is also noteworthy that Iranian imports have shown a significant growth in 2016 vis-à-vis 2015. Turkey and U.A.E have retained the 04th and 05th positions in 2016 although YOY imports have shown a fairly significant decrease compared to the same period of 2015. Meanwhile Kuwait too for the period January – July 2016 have shown a fairly substantial decrease in imports vis-à-vis January – July 2015.