TEA REPORT

John Keells Tea Market Report:

Good demand for Low Growns

The 3.9 mkgs of Low Growns that were on offer last week, met with good demand. In the leafy category, the well made OP1/BOP1s continued to sell at attractive levels, however, the below best sorts and the poorer sorts declined.

The bold Pekoes and the shotty Pekoe1s continued to sell at fully firm levels. Here again the poorer sorts were neglected.

The OP/OPAs too followed a similar trend with the poorer types being difficult of sale. The well made FBOP/FF1s and the Tippy varieties continued to sell well with the flaky varieties being neglected. A very similar tone to what we have seen in the last two to three weeks.

Considering the volumes that were on offer in the month of June and what is expected in the month of July sales, the demand is seen for Low Grown varieties are quite encouraging.

Also considering that world tea production for period January to May 2010, is approximately 100 Mkgs higher than the same period of last year.

There was excellent demand from Russia, Iran and Iraq, whilst Syria, Dubai, Jordon and other Middle Eastern markets also lent useful support. The main Saudi buyer was rather quiet.

The 1.0 mkgs of ex-estate teas that came up for sale, met with a mixed, but fair interest with brighter and better leaf teas making gains of Rs 5 to Rs 10 on average.

The below best and plainer teas lost a similar margin, with buyers following quality closely. Nuwara Eliya BOPs were firm to irregularly lower with BOPFs appreciating by Rs 5 to Rs 10. With the expected Uva season to commence shortly, a few buyers have shown some interest in sourcing the few bright invoices on offer. CTC PF1s appreciated Rs 15 to Rs 20 and more from all elevations. There was good demand from the tea bag sector and Russia, whilst UK, Japan and continental buyers too lending some support.

Western Teas

Select Best BOPs advanced Rs 5, other good invoices were firm to easier, Below Best sorts declined Rs 5 to Rs 10, plainer varieties eased by a similar margin and more.

Select Best BOPFs advanced Rs 5 to Rs 10, other good invoices were firm to Rs 5 dearer, Below Best sorts shed Rs 5, plainer varieties were irregularly lower. Select Best Medium BOPs were firm to Rs 5 dearer. BOPFs shed Rs 10 to Rs 15 on average.

Nuwara Eliya Teas

Brighter BOPs were firm, others declined Rs 5 to Rs 10. BOPFs advanced Rs 10 to Rs 15 on average.

Uva Teas

BOPs shed Rs 5 to Rs 10 and more, whilst the BOPFs were firm to Rs 10 easier. Udapussellawa BOPs declined Rs 5 to Rs 10. BOPF too were Rs 10 easier.

CTC Teas

Low grown PF1s advanced Rs 10 and more as the sale progressed. BP1s were firm to dearer. High and Medium PF1s advanced Rs 10. BP1s were irregularly dearer.

Low Growns

Fair demand. Select Best OP1s eased Rs 10 to Rs 15, however the Best types met with good demand and maintained last levels, Below Best and poor sorts tended lower by Rs 5 to Rs 10 and more following quality.

Select Best BOP1s were fully firm to irregularly dearer, a range of improved Below Best types gained Rs 5 to Rs 10, balance were irregular.

Teas at the lower end, particularly the stalky varieties tended lower by Rs 5 to Rs 10. Select Best OP/OPAs were irregularly dearer by Rs 5 to Rs 10, the Best types too were firm to Rs 3 to Rs 5 dearer, Below Best and poor types were irregularly lower by Rs 5 to Rs 10.

Select Best Pekoes eased Rs 5 to Rs 10, the Best and Below Best types were mainly firm, however the flaky varieties declined Rs 5 to Rs 10. Shotty Pekoe1s shed Rs 10 to Rs 20, Best and Below Best types were firm on last levels, however the flaky types were barely steady.

A few select Best BOPs advanced Rs 10, Best types were easier by a similar margin, Below Best types were also lower by Rs 5 to Rs 10, poor sorts were firm. Select Best and Best BOP SP were firm, Below Best types eased Rs 5 to Rs 8, poor types were also lower by a similar margin.

Select Best and Best FBOPs advanced Rs 5 to Rs 10, Below Best types gained Rs 10, poor sorts moved up Rs 5 to Rs 10. Select Best FBOPF1s were slightly lower to last, however the Best and Below Best types moved up Rs 5 to Rs 10, poor sorts were firm. Select Best Tippy varieties met with good demand and sold at attractive levels, Best types were irregular to last, Below Best and poorer sorts declined on last levels.

Off Grades

Select Best liquoring FNGS1s depreciated Rs 5 to Rs 10, whilst Below Best and others were lower by an average of Rs 15 and more at times.

Select Best and Best BMs declined by Rs 5 to Rs 10 from last levels whilst the poorer BMs too were lower by Rs 10 to Rs 15. All clean BPs were firm to dearer by Rs 5 to Rs 10, whilst the poorer sorts declined by Rs 5. to. Rs 10 and more at times.

All Low grown FNGS declined by Rs 10 to Rs 15 and more. Select Best BOP1As were firm to dearer by Rs 10, whilst the Best were firm on last levels, Below Best and poorer sorts, however shed Rs 5 to Rs 10 and more at times.

Dust

Select Best Dust1s were firm, improved Dust1s in the Best and Below Best category gained Rs 5 to Rs 10 whilst the balance declined Rs 10 to Rs 20. Clean secondaries shed Rs 10 to Rs 15, whilst the poorer sorts were firm, Best Low Grown Dust/Dust1s maintained last levels, whilst the balance declined Rs 5 to Rs 10. John Keells Tea Market Report

Finlays sends best harvesters to India

Finlays launched a new program to identify the best performing tea harvesters in 2009.

The six best harvesters were chosen from the two companies Hapugastenna and Udapussellawa plantations and were given an all expenses paid tour to Munnar, India.

This program was launched to recognize the valuable contribution by the trained tea harvesters and aptly named best tea harvester of the year competition.

The system was implemented in all our 26 estates and employees were made aware of the system through the estate managers.

The competition was carried out across all the 26 Finlays tea estates.

The best tea harvester from each estate was selected according to number of kilos and the quality of tea leaves plucked for the entire year.

The competition was narrowed down until the best six harvesters were chosen. On arrival, up to departure from India Finlays has given them a memorable event for their lives.

On behalf of Finlays Tea Estates Chairman Naresh Ratwatte who initiated this concept, HR Head Ranil Kapugeekiyana said the group has always believed that the success of their organization is its people. “We have been blessed with a well committed and disciplined work force, this program will continue further, which will help to build the morale of the workforce and help to make them feel comfortable within the organization”, he said.

The Best Tea Harvesters program was launched with the aim of recognizing and appreciating the contribution made by the company’s employees towards achieving the Finlays Tea Estates Sri Lanka corporate objectives.

The company was very keen in implementing this system since the harvesters are the backbone of the company, picking the finest tea leaves to maintain the quality and the Ceylon Teas that are marketed globally.

Throughout the competition all internal quality controls were maintained as usual to make sure that the emphasis on ‘quality’ was the main objective.

The competition was well accepted by the employees and there was a keen interest all around and has helped increase the overall morale of the workforce.

Mlesna opens Tea Centre in Kandy

Mlesna Tea Sri Lanka’s premium brand of superior quality teas opened their 15th Tea Centre at the Kandy City Centre.

The newest Mlesna Tea Centre comprises a restaurant where tea connoisseurs can enjoy their favourite cup of tea alongside the tea shop which is merchandised with over 102 varieties of teas including speciality regional teas, exotic flavoured teas and organic teas, dressed in classy and eye catching packaging to cater to the delectable tastes of tea lovers.

The well designed interior of the Tea Centre is adorned with carefully hand-picked paintings which, together with the special lighting effects, create an ambience in which visitors can wholly enjoy the tea experience.

The teas available at the Tea Centre range from flower flavours such as jasmine, rose, earl grey, mint, apple blossom to fruit flavours such as melon, pineapple, strawberry, mango, orange and blueberry. In addition, spiced tea flavours with cardamom, ginger and cinnamon are also available.

Mlesna Tea which is packed in porcelain figurines such as elephants, tea pots and other ornamental designs are also available at the Tea Centre and are ideally suitable for gifts.

‘Since its inception in 1983, while exporting our fine quality teas to the international markets, Mlesna Tea has served our connoisseur tea lovers in Sri Lanka and set up Tea Centres in key locations around the country serving fine quality Ceylon Teas,’ said Mlesna (Ceylon) Ltd Chairman and Managing Director Anslem B. Perera.

‘The opening of the Tea Centre will adorn the splendour of the Kandy City Centre offering the widest range of speciality teas in the most exquisite packaging for the ultimate choice of the most discerning tea connoisseur. We invite our dear guests to savour the flavour of Mlesna Tea in our new superior ambience, our tradition since 1983,’ he said.

Europe gets a breather before bank stress tests

The markets have given Europe some respite in its struggle against debt but the EU faces a moment of truth this week with tests that will show whether banks can survive a new economic cataclysm.

European Union governments hope the results of “stress tests” on the banking industry, which will be released on Friday, will reassure investors worried about the banks’ exposure to the continent’s sovereign debt crisis.

“It is clear to my mind that the stress test exercise is of paramount importance to restore confidence in the European economy,” European Economic Affairs Commissioner Olli Rehn said this week.

The markets have turned their attention to the health of banks after an explosion of public deficits and debts in the 16-nation eurozone weakened the single currency.

The debt drama forced European governments to bail out Greece and set up a 750-billion-euro (950-billion-dollar) safety net with the IMF for other countries to tap into if they get in trouble.

But Greece, Spain and Portugal have successfully raised money in the bond market in recent days after being battered for months.

AFp

Bank of America says financial reform to cost billions

Moves to overhaul Wall Street will cost Bank of America billions of dollars, one of the company’s leading executives said Friday.

As lawmakers sent a massive financial reform bill to President Barack Obama’s desk for signature, Bank of America’s top financial officer Charles Noski said the impact would be felt across the firm.

“In the third quarter, legislation will also hurt our value,” he told investors on a quarterly earnings conference call.

Noski said the rules, which have still to be fleshed out by regulators, could wipe 10 billion dollars off the intangible value of the firm, a so-called goodwill impairment, and would hit profits in its bank-card business.

“We expect goodwill impairment of seven to 10 billion dollars in the third quarter,” he said. Goodwill represents the company’s off-book, intangible assets, like relations with customers and reputation.

But Bank of America also faces concrete costs.

Legislation passed by Congress on Thursday would reduce banks’ ability to charge traders for swiping bank cards so called interchange fees.

“Interchange fees could fall as much as 1.8 billion dollars to 2.3 billion per year, starting in the third quarter of 2011,” he said.

Bank of America, like other Wall Street firms, is scrambling for ways to offset the costs of reform, leaving many consumers to fear they will bear the cost of the overhaul.

“We are looking for ways to mitigate that potential drop in revenue,” said Noski.

AFp