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| Thursday, 3 June 2004 |
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Drop in tea prices not unusual, say brokers By Steve A. Morrell Tea market prices declined last week. However some estates that maintained standards were able to sell at the top of the elevation average. brokers said this trend would continue in the next three or four weeks. "Quite unavoidable because plantation areas reported heavy crop intakes last month and those 'rush' crops were being sold now". As observed the previous week the decline in prices would continue till the change in weather would bring about a, more stable situation. "The market is likely to drop this week too, they said. Prices were more or less lucrative at low elevation sites and this contributed to the maintenance of price levels at that elevation. This would not mean that the tea industry would face bad times. Brokers who predicted that tea would continue to be a money spinner the rest of the year were confident that the drop in prices was temporary, and when the Uva quality season begins the influence stemming from market gains which could be expected at that time would have a salutary effect on overall prices, they said. The Uva quality would be prevalent around July, and this year too this distinctive characteristic could be expected. They cautioned however, that Ceylon Tea had been priced out of Egypt, Pakistan, and some other Middle East markets, in preference to tea from Kenya, Mozambique, Malawi, and other COMESA (Common Market for Eastern and Southern African)(Countries) because Ceylon Tea had become too expensive to sustain consumer interests in those countries. This was in the context of the Collective Agreement now being negotiated with Plantation Unions. Plantation sources were also cautious in commenting on the progress in discussions because of the sensitive nature of guidelines being negotiated. Tea from many estates remained un-sold because standards were not maintained, and would be offered at the auction again as re-prints around three weeks hence but such offerings would be at reduced prices. At the sale on May 18 and 19, 7.4 million kilograms were on offer. This week 9.1 million kilos will be on offer, which is quite substantial, they said. Regardless of the drought which prevailed early this year and the subsequent drop in crop, 77.1 million kilos were sold up to end April, an increase of about 12 million kilos compared to 2003. The crop increase was attributed to the low elevation contribution mainly from smallholder locations. CIS countries, UAE, Syria, Turkey, Iran, Jordan, Japan and Iraq, were all major buyers this year, with also the entry of The US and The Netherlands who showed substantial interest. On the Western slopes the top gainers were Adisham (Managed by Watawala Plantations Ltd.,) and Stokholm (Managed by Horana Plantations Ltd.,) selling at Rs. 215 and Rs. 251. Kenilworth maintained its leader status in the mid-grown elevation. Of the high growns Court Lodge and Mahagastotte sold at Rs. 193 and Rs. 192. |
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