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Tea Report:
Bartleets weekly tea surveillance up to August 15
THIS week a total quantity of 6.22 m kg arrived as compared to last
week an increase of quantity of 0.07 m kg was sold at the Colombo
Auction. Out of this the ex estate were 0.82 m kg which is an increase
of 0.03 m kg.
The Pekoe market has continued to drop. One of the reasons could be
that Turkey recently held national elections, the results of which could
lead to regulations that can affect future demand and prices.
On the ex-estate segment, unhealthy weather conditions are once again
leading to lower quality that is also affecting demand. In the Tippy
market, fair demand has been recorded. Iran and Dubai have been very
active whilst the CIS and Saudi Arabia have recorded moderate buying.
A new Online Export Documentation system has been installed for the
Sri Lanka Tea Board and it is hoped that it will fast-track the tea
industry into a fully electronic transference procedure with
cutting-edge technology.
The new electronic transfer system promises to cut down manual
transport costs and halve the processing time it takes for tea export
CUSDEC forms to be approved, as well as providing a much-needed element
of security.
As Sri Lanka is a leading tea exporter in the world, with tea exports
making up 25 per cent of the countries export earnings, this development
is certainly a significant one.
So far only forty of the 270 tea exporters have utilised the system
even though the technology promises to reduce workload and greatly
reduce processing time. According to the source, normal transfers that
take days took just 23 minutes with the new system.
The Plantation Industries Ministry is in the process of introducing a
pension scheme which is being proposed for plantation workers in the
tea, rubber and coconut sectors. This is similar to the proposed pension
scheme for owners and workers of small tea estates.
Also in the pipeline is a 1.5 million ‘Randalu Pension Scheme’ for
tea sector workers and a scheme for semi-disabilities and total
disablities according to the Ministry.
Tea production data for Sri Lanka indicates a 12.7 per cent reduction
for the first six months of 2007 with only 143.6 million kgs produced
compared to 164.5 million kgs in the same period the previous year.
The main reason is the rising costs of production which is mainly due
to the wage hike of 33 per cent after last year’s strike and the loss of
production in late 2006.
Global tea production for the year 2006 showed an increase to 3,523 m
kgs. India gained 27.9 m kgs, China gained of 85.0 m kgs and Vietnam too
showed a variance of 20.0 m kgs. Kenya and Sri Lanka both lost
quantities but managed to keep prices high.
Kelani Valley Plantations PLC (KVPL), part of the Hayleys Group has
reported a turnover of Rs. 1.2 billion for the six months ending June
30, 2007 showing a marginal improvement over the corresponding half of
2006 despite a significant loss of tea crops particularly in the first
quarter of the year.
This supported by a 32 per cent increase in the average sale price
for tea, enabled the company to post a satisfactory performance.
In the first quarter KVPL witnessed a loss of about a third of the
company’s tea production as a result of a 30-day go slow and strike by
plantation workers in late 2006.
The adverse impact of this crop loss was compounded by a wage
increase and a sharp rise in fertiliser costs in the period under
review.
Of the 18 plantation stocks nine are down, five up and four static.
Of the gainers, Udapussellawa gained 20 per cent whilst Kahawatte and
Bogavantalava both rose by nine per cent respectively, week on week.
A few select best BOPs were marginally lower. Other high priced teas
along with the below best varieties were easier by Rs. 5-8 and more.
Plainer clean leaf sorts sold around last levels whilst the others
declined by Rs. 5-10. Poor leaf sorts were substantially lower. Select
best BOPFs sold around last levels whilst the others declined by Rs.
10-15.
Below best varieties followed a similar trend and were lower by a
similar margin. Poor sorts were difficult of sale. |
