Tea Market

Bartleet Produce Marketing Tea Surveillance upto July 2:

Good demand for Tippy market

The quantity of tea arriving at the Colombo auction this week decreased to 7.064 mkg from 7.46 mkg traded in the previous week’s sale. Meanwhile, the Ex-estate crops too showed a decrease from 1.098 mkg to 0.927 mkg.

Market Segments: In the Ex-estate segment, Westerns came down whilst the Udapussellavas showed some gain due to the Uva seasonal brighter teas coming into the market.

Meanwhile, the price fluctuation is attributed somewhat to the Kenyan and Indonesian markets activities on the liquoring teas. Japan and other usual buyers were active whilst UK was somewhat selective.

CIS buying pattern had been usual compared to the past few weeks.

As the peak season on the freight is around the corner the prices of freight charges too are expected to move up with somewhat space restriction on container vessels.

As well as the day to day increasing oil is anticipated to increase the fertiliser prices affecting the long term sustainability of the crops, further to industry sources.

In the Tippy market segment good demand was witnessed where buyers from Dubai and CIS were moderate in their buying patterns. Buyers from Turkey and Saudi Arabia were very selective.

The Leafy grade segment except for select best category of all varieties the rest of the teas fetched low prices compared to last week. Absence of major shippers to CIS countries contributed towards low demand.

Bottom types of OPA grade picked up as some of the buyers were buying heavily, who ship to Iraq.

Maximum Research: The Sri Lanka Tea Board is to pump in over Rs. 30 million this year to equip a new laboratory for the tea export industry.

The investment will facilitate testing for Maximum Residue Levels (MRLs) demanded by Japan and the European Union buyers who are becoming important markets for Ceylon tea.

According to the SLTB Chairman, plans are under way to develop capacities domestically by bringing down much needed equipment. In this way, companies will not have to outsource the task to countries like Germany. Meanwhile, MRL testing is now a mandatory requirement for Japan and EU imports.

According to the Central Bank, in 2007 tea exports to Japan brought in slightly over Rs. 4 billion while exports to the EU brought in around Rs. 12 billion.

Even so Japan holds the sixth position in export destination and Sri Lanka gets some of the best prices for its tea shipments to Japan where it holds two thirds of the black-tea market.

Turkish Ties: Turkey which is one of the main markets for tea exports has agreed to grant tax concessions on imports of tea from Sri Lanka under the renewed trade relationship between the two countries according to the Consumer Affairs Minister and the delegation who paid a recent visit to Turkey.

Currently, a custom duty of 140 per cent is levied on Sri Lankan tea as a measure aimed at protecting the local tea trade as Turkey too is a producing nation to a certain extent.

However, there is a huge demand for Sri Lankan tea in the country and the Turkish authorities had agreed to review their tax policy with regard to tea imports from Sri Lanka.

The Minister also stated that the Government will sign a trade agreement in the near future.

Kenyan Comeback: Bulk fertiliser imports aimed at making inputs affordable to farmers is set to arrive imminently in Kenya. The cargo is the first in a series of bulk imports that the Kenya Tea Development Agency (KIDA) is expected to ship in to boost the production of key crops, which were battered in January’s post-election violence.

The Agriculture Minister has been behind the move aimed at providing affordable fertiliser in the market in order to facilitate a speedy recovery for the hard-hit tea trade.

Plantation Stocks: with reference to the weekly surveillance of the 19 plantation stocks, 16 were lower in value whilst two reported a gain and one reported static.

Elpitiya plantations reported a gain of 13 per cent, week on week.