Heavy buying pattern from CIS

The quantity of tea arriving at the Colombo auction this week decreased to 6.200mkg from 6.501mkg traded in the previous week’s sale. Meanwhile, Ex-estate crops showed a decrease from 0.783mkg to 0.715mkg.

Market Segments: In the Ex-estate segment, a generally strong market was witnessed this week. However, sources are anticipating that anything plainer coming in will have an irregular demand whilst anything brighter will fetch good demand in the future auctions.

The CIS showed heavy buying patterns with the UK and the Continent being strong whilst Japan picked up on anything brighter during the sale. Sources also claim that the Kenyan crop has reported a gain as compared to the same period last year.

Industry stakeholders are anticipating that if Kenyan output reports a plus figure for the next three months some impact will be witnessed here in Colombo by January next year.

In the Tippy market segment lower demand was witnessed.

Buyers from Dubai and Iran were very selective whilst the Middle East and CIS were moderate in their buying patterns.

Overall Leafy grade segment experienced a lower market. Due to border closure Pekoes dropped sharply, even shippers to CIS countries were not so active.

Better signs: According to the Tea Board, exports had risen by more than 40 per cent in the first eight months of the year and are on a path to earn a record $1.4 billion this year.

Meanwhile, it was stated that shipments of tea had climbed 41 per cent to $883 million from January to August as compared to last year which was mainly driven by strong demand from Russia and the oil exporting nations of the Middle East.

Sri Lanka, the world’s largest tea exporter after Kenya, has benefited from the recent global commodity boom with its tea fetching the highest average auction prices on world markets during this year.

The favourable weather patterns and the application of fertiliser at the right time has also supported the current boom.

According to the Tea Board, shipments of tea climbed 9.7 per cent to 220.3mkg (484.6 million pounds) for the eight months to August from the corresponding period in 2007.

According to the Chairman, the total production is expected to each 320mkg and given the current prices, export earnings are expected to record $1.4 billion this calendar year.

Charity values: The successful completion of the charity gave the industry vital information that single garden marketing was picking up in the tea sector around the world.

According to Tea Board sources, the charity auction teas were all single garden teas with approximately 26 garden marks being sold.

Of the better known Westerns, Kirkoswald, in Bogowantalawa, Norwood, in the Norwood basin, and Diyagama West, bordering Horton Plains, sold main line teas at approximately Rs. 9,000 per kg.

There were also others marks from higher elevation selling at high prices thereby adding value to the charity auction.

However most outstanding was Pothutuwa, in the low country which sold a flowery BOP special, at an all time high of Rs. 12,700 per kg.

Indian Fire: According to Info line News Service in Mumbai, Tea stocks are on fire as prices rise. The major gainers are McLeod Russel, Harrisons Malayalam and Jay Shree Tea. The tea stocks are witnessing a momentum as the tea season due from April 2009 would start with a short fall of at least 75-80mkg of tea according to the Chairman of the India Tea Association.

So the inevitable consequence would be the price rise, he added. Meanwhile at the current consumption growth of 3.5 percent annually, the domestic demand would rise by an additional 35-38mkg and the exports in the current year too would be up by another 35-40mkg, he added.

Green prize: Shangri La Tea Company with 20-years in the business was awarded first place at the 2008 World Tea Expo in Las Vegas. Shangri La received this international distinction for two of it iced organic green teas from hundreds of entries around the globe. Awarded the Best in the Food service category, Shangri La’s Green Flavord Organic Pomegranate Melon Green Tea and its Green Unflavored Organic Green Tea received accolades from a panel of judges comprised recognised industry experts.

President of World Tea Expo stated that more than 200 teas from 30 countries from around the world were judged.

Plantation stocks: With reference to the weekly surveillance of the 18 plantation stocks, 16 were lower in value whilst two reported static.