Auction sees decrease in quantity

Bartleet Producemarketing Tea Surveillance report up to April 29:

The quantity of tea arriving at the Colombo Auction this week decreased to 7.694 mkg from 7.944 mkg traded in the previous sale. Meanwhile the Ex-estate crops showed an increase from 1.096 mkg to 1.100 mkg.

Market Segments: In the Ex-estate segment due to the volumes coming in there had been a draw back on the quality aspect. Buyers from CIS had been active but on a lower market level due to the quality whilst buyers from Japan, UK and the continent too showed a considerable buying pattern. The trend of high crop and low quality is expected to continue further.

In the Tippy market segment there were good demand where as Iran was very actively buying whilst CIS and Dubai were moderate in their buying patterns. In the Leafy Grade segment considerable demand was witnessed for Pekoe/Pekoe 1 due to the shippers to Turkey buying heavily.

Kenyan Market

The Kenyan tea production for the first three months of the year fell by 35 per cent to 70 million kilos from 108 million kilos during the same period last year. The drop had been due to the prevailing dry weather condition in the region. During the period Kenya exported to 36 market destinations worldwide compared to 40 destinations last year.

Meanwhile out of the five traditional markets which are Egypt, UK, Pakistan, UAE and Sudan, UAE registered the highest growth of 19 per cent in export volumes compared to 2007.

Meanwhile the tea prices rose for a second consecutive week climbing 5.1 per cent to $2.26 a kilogram at the sale on April 14 and 15, from $2.15 last week according to Mombasa-based Africa Tea Brokers Ltd.

New Markets (Export Drive): One of the biggest departmental stores in France has taken steps to introduce Sri Lankan tea in its chain of super markets across the country.

The official inauguration of Sri Lankan tea promotion was held on Friday (April 18) at the Carrefour at Auteuil in prestigious Paris 16 area with the participation of Carrefour (Auteuil) Director Daniel Kalache, Sri Lankan Ambassador and other dignitaries. The event was organised by the commercial Section of the Sri Lanka Embassy in France with the assistance from Sri Lanka Tea Board.

Meanwhile according to the Acting Director (Promotion) Sri Lanka Tea Board, Poland is been eyed as a lucrative market for Sri Lankan tea and numerous opportunities exists in the Polish tea market.

The demand has become stronger for natural food products due to the increased buying power of the polish consumer after joining the EU which are plus points to the trade. Poland is the third largest importer of tea in Europe and second largest tea consumer in the region.

Policy: Due to some falling production and low estate performance in the Regional Plantations Companies (RPCs) a 10-member committee has been appointed to look into these issues in identifying and effectively support to contribute its share as a partner to attain macro-economic stability in the country.

According to the Chairman of this special committee the main criteria's will be looking into replanting and application of fertiliser, sub leasing, and labour infrastructure development, upgrading labour lifestyles and increasing profitability by improving efficiency.

Plantation stocks: With reference to the weekly surveillance of the 19 plantation stocks, four were high in value whilst 10 were lower and five reported static. Kahawatte, Balangoda and Madulsima plantations witnessed a gain of four, two and two per cent respectively, week on week.

The plantation sector on the Colombo bourse gained 42.7% since December 2007 to date recording 835.6 index points (since April 2007 it has increased by 99.1%) due to healthy earnings potential and the strong second half in 2007, according to a Lanka Securities (Pvt) Ltd report.

Weekly average price movements

Western High Growns

Select best Western BOP's declined Rs. 20-30 per kg and more towards the close of sale. Others together with below best sorts lost Rs. 10-20 per kg. Plainer sorts declined by a similar margin. Select best BOPF's lost Rs. 20-30 per kg, whilst others lost by Rs. 15-20 per kg. Plainer varieties declined Rs. 10-15 per kg.

Western Medium Growns

Best BOP's lost Rs. 5-10 per kg, whilst the others declined substantially. BOPF's lost Rs. 30 per kg.

Nuwara Eliyas

Few BOP's sold around last levels, whilst others declined up-to Rs. 10 per kg. BOPF's lost Rs. 10-15 per kg.

Uva Udapussellawa

BOP's commenced the sale at last level, however, progressively lost Rs. 5 per kg. BOPF's declined Rs. 10-15 per kg.

CTC

The demand for BP1's lost progressively and were lower by Rs. 10-20 per kg. High and Mid Grown PF1's declined by Rs. 15-20 per kg, the Low Grown PF1's appreciated Rs. 5-10 per kg.

Off Grades

Liquoring FGS/FGS1's were lower by Rs. 5-10 per kg, whilst the low grown cleaner BM/FGS's were depreciated by Rs. 5-7 per kg.

Dust: Select best primaries sold at last levels. Improved DUST1, gained 5-8, others and poor sorts were irregular and mostly dearer, cleaner secondaries gained 4-5, others gained 2-5, better low grown were firm others declined 5-10. Well made CTC's gained 5-10, others maintained last level.