Tea Market - comment

SALE: There was improved demand displayed for OP1s and OP grades the week which recorded satisfactory gains all round. Select best BOP1s sold around last levels, whilst others tended irregular.

A few shotty Pekoe/Pekoe1’s sold at last weeks high levels, whilst all others declined substantially once again.

High price OPAs tended lower at the commencement of the sale and appreciated in value as the sale progressed. Poor leaf sorts tended irregular this week.

Better Semi and Small leaf varieties sold at firm to dearer rates, but the others declined in value. Tippy teas were once again irregularly dearer.

There was good general demand in the Ex-Estate catalogues, but the market correction for BOPF that set in mid last week continued at this sale as well. Best western BOP/BOPF though realizing attractive levels of price shed Rs. 5 to Rs. 10 particularly for invoices that had not maintained quality.

Others declined Rs. 5 per kg on average. The market for CTC PF1s remained firm for the very best but there was loss of value of Rs. 5 to Rs. 10 in the below best category. The tea for price segment held firm.

High priced Nuwara Eliya’s of last week declined Rs. 10 to Rs. 20. BOPF too were lower, but not to the same extent Brighter Uva/Udapussellawa BOP/BOPFs were irregular but a wider range of invoices attracted more support and gained value.

Record monthly tea sale averages in July

Colombo Brokers Association data released this week confirms that the average price per kilogram of tea sold during the month of July for High Growns is Rs. 23231, Mediums 237.42 and Low Growns 310.77 with the Total Average being 278.37.

Siyaka Research data indicates that the July 2007 Low Grown average is the first time ever an elevational average crossed the 300 Rupee mark. In US$ too these figures convert to records for High $2.09, Mediums $2.14, Low $2.80 and Total $2.51.

In 2006 the three elevational figures were $1.96, $1.61, $1.89 and total $1.86. This confirms that the Rupee gains on the averages exceed the depreciation of the currency.

For the High and Medium Grown estates these figures give little comfort as the cost of production rose sharply during the period as crop in takes declined due to bad weather.

In May High Grown production declined 14% on 2006 quantities in June Production was 10% lower. July too will follow a similar trend. Low grown Small Holders however have enjoyed healthy increases in bought leaf rates over the last three months, which have compensated for a decline in production of 16% in the month of June.

Courtesy Asia Siyaka Commodities (Pvt) Ltd.