Business tea report

Bartleet produce marketing tea report:

CIS buying pattern stable

The quantity of tea arriving at the Colombo auction this week decreased to 7.244Mkg from 7.785Mkg traded in the previous week’s sale. Meanwhile, the Ex-estate crops too showed a decrease from 0.931Mkg to 0.823Mkg.

Market Segments In the Ex-estate segment, a strong market was witnessed overall. Uvas in particular were strengthening up as well as brightening up, a trend that is anticipated to continue till the end of September. Meanwhile, a clear pattern has been observed on some of the smaller leafs such as BOP Fanning’s and fanning grade which are also strengthening due to the low quantities arriving at the auctions.

One reason cited by some industry sources is the trend of more and more estates turning to manufacturing of leafy teas. The strong trend is anticipated to continue through the season as the buyers from Japan UK and the continent are quite strong and picking whatever the brighter teas are available.

The CIS buying pattern was stable as usual. In the Tippy market segment, Iran was active whilst the CIC and Dubai were moderate. Meanwhile Saudi Arabia and Turkey showed very selective buying patterns at today’s auction. In the Leafy grade segment, as expected low grown leafy grades came down drastically with most of the teas been unsold.

All the local buyers had a fear of collection problem and there by avoided purchasing large volumes. This really affected the prices and it will bring down the sale averages by fair margins.

Accolades: Melfort Green Teas Pvt Ltd gained international quality acclaim when their entry in the North American Tea competition, won two top awards, including the overall category.

Sri Lanka Tea Board in collaboration with the Tea Associations of USA and Canada had re-launched the “Estate Tea of the year Competition” in USA, which was held recently at Mandalay Bay convention center in Las Vegas. The aim of the event was to stimulate consumer and media interest in the concept of specialty tea from Sri Lanka.

There was an overwhelming response from tea manufactures with over 400 entries competing for top honors. The competition enabled tea manufactures to showcase higher quality garden mark teas to the North American markets, especially in the context of growing demand for such teas.

Common interests: Leading tea producers such as India, Sri Lanka, Kenya, China and Vietnam have decided to set up a body with an aim to co-ordinate among themselves for better functioning of the industry in member countries.

The international body is slated to be floated later this year. According to the Indian Tea board chairman, an inter-governmental group under the aegis of Food and Agriculture Organisation (FAO) had decided to set up an international body of tea producing nations. According to him this international body will not be a cartel but will be a coordinating type of body in nature.

Furthermore, the body will also regulate the quantity and quality of tea produced in various countries.

Kenyan buying: The latest development from East Africa is that the Kenyan tea industry, which is currently suffering from lower production, has taken measures to buy Indian tea in order to fulfill its export commitments. According to available statistics, its tea production during January-May which is at 134.6Mkg is down by 36.8Mkg.

The production has been affected by drought and political tension witnessed during the beginning of the year. Kenya is one of the top two tea exporting nations along with Sri Lanka.

Meanwhile, to meet the obligation, Kenya is buying tea from India. According to industry sources, the purchase for Kenya by merchant-exporters does not figure in the Indian export data at present but will start reflecting on the export figures soon. This is not the first time that Kenya is buying Indian tea.

During 2006, when its production was affected by bad weather, it bought 8.74Mkg of tea at an average Rs. 55.84 a kilo. According to the Indian Tea Board statistics, data for last year shows that Kenya had bought 3.01Mkg at an average price of Rs. 47.71. This Kenyan interest in Indian crops has led to an increase in the Indian auction prices, according to industry sources.

Plantation stocks: With reference to the weekly surveillance of the 18 plantation stocks, three were lower in value whilst 13 reported a gain and two reported static. Balangoda, Maskeliya and Horana plantations reported a gain of 13, 12 and 11 percent respectively, week on week.