Tea Report

John Keells Tea Market report:

Strong demand for High and Medium CTC Teas

Black tea production for April 2010 showed a slight drop of 3 percent compared to the corresponding period of 2009.

High Growns have recorded the highest deficit with 28 percent, followed by Medium Grown at 8 percent. Low Growns, on the other hand has shown a surplus of 14 percent.

The to-date production for the year stands at an impressive 30 percent over 2009, with major contributions coming from Low growns at 44 percent and Medium growns at 25.36 percent.

As predicted in our recent market reports the large quantity of 1.37 mkgs of ex estate teas that came up for sale today met with poor demand, with prices depreciating by Rs 50 to Rs 60 and more for both BOP and BOPF.

Although the price declines were expected the extent to which it dropped was somewhat concerning particularly in view of the fact that the volumes on offer at the forthcoming sales showed, little change.

The better BOP/BOPF where the leaf appearance was above average and liquors which had some merit sold well although the prices were Rs 10 to Rs 20 easier compared to the previous week.

The below best and the plainer invoices were the most affected with the bottom of the market selling around Rs 240. Although the price gap in the Western High Grown category for BOP and BOPF were irregular most Uva BOPs sold above its counterpart.

A redeeming feature of today’s sale was the stronger demand that prevailed for CTC teas for the High and Medium category whilst Low Growns were barely steady.

The 2.9 mkgs of Low Growns that were on offer met with limited inquiry.

Inclement weather that Colombo experienced during the past week hampered many buyers collecting their purchases, as a result many a shipment were not effected.

We also presume that cash flow problems faced by some of the small time operators at the Colombo auctions, refrained from making any purchases this week.

Hence the lower demand.

We have seen a considerable improvement in the weather from Sunday onwards and we expect operations to normalize during this week. Therefore more demand could be expected in the ensuing weeks. In the leafy category, most teas on offer declined Rs 10 to Rs 20, whilst in the Small leaf category with the exception of the tippy varieties, all others took a similar drop.

The volume of unsold teas at this week’s auctions due to the lack of suitable bids were rather high.

There was good support from Russia, Iraq and Iran, whilst Saudi Arabia, Jordan, Syria, Libya and other Middle Eastern markets too lent useful support.

Western Teas

Select Best BOPs declined Rs 10 to Rs 15 and at times more, other good invoices shed Rs 20 to Rs 30 on average, Below Best sorts declined Rs 30 to Rs 40 and more, plainer varieties shed Rs 40 on average.

Select Best western BOPFs shed Rs 15 to Rs 20, other good invoices declined Rs 30 to Rs 40 and more, Below Best sorts were Rs 40 to Rs 50 easier, plainer varieties shed Rs 30 to Rs 40 on average.

Medium BOPs were firm to marginally easier. BOPFs shed Rs 20 to Rs 30 and more.

Nuwara Eliya Teas

BOPs declined Rs 20 to Rs 30 and at times more. BOPFs eased Rs 15 to Rs 20 on average.

Uva Teas

Coloury BOPs were firm, others declined Rs 15 to Rs 20 and at tines more. BOPFs shed Rs 30 to Rs 40 and more for the poor leaf sorts. Udapussellawa BOP/BOPFs declined Rs 40 to Rs 50 on average.

CTC Teas

Low Grown PF1s eased Rs 50, BP1s were Rs 40 to Rs 50 lower. High and Medium PF1s declined Rs 15 to Rs 20 and more. BP1s were Rs 5 to Rs 10 lower.

Low Growns

Lower demand. Select Best OP1s declined substantially, the balance too were lower by Rs 5 to Rs 10 and more following quality. Select Best BOP1s shed Rs 5 to Rs 10, Best types along with the Below Best types shed Rs 10 to Rs 15 and more at times, poor types too were lower by a similar margin. Select Best along with the Best OPAs eased by Rs 5 to Rs 10, Below Best and poor sorts declined Rs 10 to Rs 15.

Select Best Pekoes were firm to Rs 5 to Rs 10 dearer at times however the other bolder varieties declined sharply by Rs 15 to Rs 20 and more at times. Select Best Pekoe1s eased Rs 10 to Rs 20 and more following quality, the balance too declined Rs 10 to Rs 15.

Select Best BOPs maintained last levels, however the Best and Below Best types eased Rs 10 to Rs 15, poorer types declined Rs 10 to Rs 20. Select Best BOP.SPs eased Rs 5, Best and Below Best types eased by Rs 5 to Rs 10, whilst the poor types were lower by Rs 10.

Select Best and Best FBOPs/FBOPF1s shed Rs 20 and at times were difficult of sale due to want of interest, Below Best and poor types too met with similar demand. Select Best tippy varieties met with good demand and advanced a few rupees on last, however the Best and Below Best types shed on last levels, poorer types too were lower by Rs 10 to Rs 20 and at times remained difficult of sale due to lack of demand.