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Good demand for low grown tea

Although buying for Iran appeared to be waning last week, there was excited competition at this week's Auction from shippers to Iran, for the Flowery Grades. The FBOP grade improved Rs. 5 to Rs. 10 whereas, the Tippy varieties advanced by around Rs. 100 to Rs. 200. In the best category, the improvements were greater, with the FBOPF Extra Special of Co-op Lanka Tea Factory recording an all time record price of Rs. 4,500 per kg. This tea was purchased by Union Commodities (Pvt) Ltd, and brokers for the sale was John Keells Limited.

In respect of the last week's sale, although the Low Growns encountered a weaker market, the average has increased by Rs. 2.63 to reach Rs. 166.35. Two factors would have contributed to this unexpected increase in the average. One was the clearing of the backlog, where a large weight of higher priced Low Grown teas were included for the said sale. The other is no doubt due to the fairly large volume of unsold teas against the poorer Off Grades and Poorer Dusts which did not get included in this computation. The above sale average shows up well on comparison with the corresponding sale of last year when the average price was Rs. 159.41.

However, the liquoring market stayed weak. Leading buyers of liquoring teas continued to be very selective, and despite a slight improvement to product quality of a fair weight of tea, the prices failed to advance in the main. The substantial offer quantities, relatively poor product quality, and the satisfactory world supply situation can be identified as the contributory factors. It is hoped that, in the ensuing sales, as product quality improves and offer quantities decline, the demand would improve.

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