Business Tea Report

Bartleets Weekly Tea Surveillance up to December 12:

Strong demand from CIS, Japan

The quantity of tea arriving at the Colombo Tea Auction this week has picked up from 5.050 mkg to 6.152 mkg as compared to the previous sale. Ex-estate crops too have picked up from 0.589 mkg to 0.908 compared with last week.

Ex-Estate market has shown a higher demand due to the low crop. Strong demand was visible from CIS and Japan. In the Tippy market, there was fare demand, where Iran and Dubai were active whilst CIS was moderate.

In the Leafy-grade segment, as predicted last week Pekoe prices moved up further overtaking OPA prices whilst Turkey was very active but on the other hand Middle East was a little quite. Shipments to Iraq and Chile are to go on board by the third week of December and therefore the bottom OPA’s met with strong demand.

The Urban Development Ministry has made arrangements to construct 103 permanent housing units costing Rs. 20 million for estate worker families in Kuliyapitya. With the direct participation of the beneficiary families each will be given an area of 500 square feet together with funds worth Rs. 175,000 for construction purposes.

Sri Lanka’s value added teas have witnessed a downfall to 36.2 per cent in 2006 from 48 per cent 1997.

In order to drive this segment, IDB teamed up with Lanka Tea Board in pooling up funds worth Rs. 70 million for the purchase of a Liquid Chromatogrpah Mass Spectrometer that can check quality of tea for ingredients, flavours and chemical residue including pesticides.

This in turn can make the Sri Lankan Tea more competitive in the stringent quality world market in increasing its share in value added tea.

According to the Chairman of Tea Advisory Committee, the primary need is to identify why Sri Lanka has lost business in markets such as Russia, UAE, Syria, Japan, Iraq and Jordan.

This will help to mobilise the marketing drive to acquire the lost stake. It was also stated that the value added teas should be test marketed in potential new markets like Tanzania, Malawi, France, Austria, Belgium and Bangladesh.

Dr. Martin Luther King is quoted to have said that those who remain silent in injustice are as guilt as the perpetrators.

In a confession that is in keeping with the season of Christmas, one who failed to speak out and remained silent despite the injustices taking place around him voiced his conscience this week in a leading national daily.

The victim here was, Dr. Ziyad Mohamed, the former Director of the Tea Research Institute, who was first imprisoned and then served vacation of post in the middle of 2006 for his visiting Japan without prior ministerial approval - never mind the fact that he was instrumental through this visit in lifting the ban placed by Japan on Sri Lanka tea.

Geared by strong interest in plantation companies, Sri Lanka’s shares rose 0.59 percent due to the fact that Tea prices hit record heights.

Low growns were at a peak, gaining up to 60 percent of Rs. 350 per kilo in November from a year ago according to the SLTB statistics.

Bartleet Mallory Stockbrokers claim that foreign investors were attracted first due to the high prices before being followed by the retailers trading heavily on the stocks.

With reference to the weekly stock surveillance of the 19 plantation stocks, 17 were up in value, one was down and one reported static.

Thalawakelle, Elpitiya and Madulsima were the main gainers week-on-week, reporting price improvements of 38,36 and 33 per cent respectively.