Tea

John Keells Tea Report:

Quality, demand picking up

After the large crops in the second quarter of 2010 and the consequent but not unusual drop in prices, quality and demand appears to be picking up as auction quantities keep falling off. With seasonally brighter teas on offer, particularly from the Eastern sector, we expect prices to remain firm to dearer in the coming sales.

The latest tea crop statistics released by the Sri Lanka Tea Board, records a marginal increase of 1.2Mkgs in July compared to the corresponding period of 2009. Once again it has been the mid grown that have recorded significant gains of 26 percent followed by 9 percent from the High grown. Today’s Ex Estate sale comprising of a little over a million kgs of tea met with good demand where prices improved substantially as the sale progressed. It was pleasing to note the additional interest shown for the Western High Grown BOPs that had been neglected for some time.

Western High Grown BOPFs commenced on an irregular note but appreciated Rs 20 to Rs 25 as the sale progressed. Nuwara Eliya BOPs witnessed an easier market whilst BOPFs maintained its price range of Rs 400 to Rs 410 on average. Most of the Uva BOPs, with some seasonal character sold above Rs 400 with the best on offer selling at Rs 980. BOPFs too appreciated Rs 30 to Rs 40 for the best on offer whilst plainer teas, being barely steady.

CTC PF1s were well sought after with High and Medium types gaining Rs 25 to Rs 30 on average. Low Growns on the other hand maintained its strong price structure selling between Rs 500 to Rs 530, which is also Rs 5 to Rs 10 dearer to last week. Russia and the Tea Bag Sector lent useful support, while Japan and Continental buyers bid strongly on selected improved teas.

3.3 Mkgs of Low growns that were on offer this week met with excellent demand. Prices for most grades advanced Rs 10 to Rs 20 with the exception of the stalky OPAs and the flaky FBOPs.

The Low Grown average for this weeks sale is expected to surpass the Rs 400 level.

There was excellent demand from Russia, Iran and Iraq, whilst Dubai, Syria, Saudi Arabia and the Middle Eastern countries lent useful support.

Western Teas

A few Select Best BOPs advanced Rs 5 to Rs 10, other good invoices were firm, Below Best sorts were firm to dearer, plainer varieties maintained.

Select Best BOPFs were firm to dearer, other good invoices advanced Rs 5 and substantially more as the sale progressed, Below Best sorts advanced to Rs 10 and more as the sale progressed, plainer varieties were firm to dearer. Medium BOPs declined Rs 15 to Rs 20, whilst the BOPFs were irregular. Nuwara Eliya Teas BOPs declined Rs 10 to Rs 15 with a fair volume remaining unsold. BOPFs were firm.

Uva Teas Bright seasonal BOP/BOPFs sold well on special inquiry, other BOPs on offer advanced Rs 5 to Rs 10, whilst the BOPFs gained Rs 10 on average. Uda Pusellawa BOP/BOPFs advanced Rs 5 to Rs 10.

CTC Teas

Low Grown PF1s gained Rs 10. BP1s were firm to irregular. High & Medium PF1s advanced Rs 10 to Rs 15 and more. BP1s gained Rs 10.

Low Growns

Excellent demand. Select Best OP1s were firm to Rs 5 to Rs 10 dearer, Best along with the wiry Below Best types gained sharply by Rs 20 to Rs 30 and more at times, poor types too were dearer by Rs 5 to Rs 10 following quality. Select Best BOP1s were irregularly lower by Rs 5 to Rs 10, however the Best types were fully firm, others and improved Below Best types gained Rs 10 to Rs 20, poor types were irregular.

Select Best OPs eased Rs 10, Best types were steady, Below Best and poor sorts were irregularly lower by Rs 5 to Rs 10 and more at times. Select Best OPAs appreciated Rs 5 to Rs 10, however the Best types declined Rs 10 on average, Below Best types maintained last levels, poor types tended lower by Rs 5 to Rs 10. Select Best Pekoes declined Rs 10 to Rs 20, however the Best types appreciated Rs 10 to Rs 15, balance too gained sharply by Rs 10 to Rs 20 and more following quality. Select Best Pekoe1s along with the Best types advanced Rs 10 to Rs 20, Below Best and poor sorts too were irregularly dearer by a similar margin.

Select Best and Best BOP.SPs were firm, Below Best and poorer types were irregularly lower to last.

Select Best and Best BOPs moved up Rs 5 to Rs 10, Below Best types too gained by a similar margin, poorer types shed by a similar margin. Select Best FBOPs met with strong demand and moved up by Rs 20 and at time more as the sale progressed particularly towards the latter part, Best types too gained by a similar margin, Below Best types and poorer sorts too advanced Rs 10 to Rs 20. Select Best and Best FBOPF1s moved up by Rs 20, Below Best types too gained by a similar margin, poorer types met with irregular demand. Select Best tippy varieties were irregularly lower to last, Best and Below Best types declined Rs 20 to Rs 30, poorer types often remained neglected and difficult of sale.

Off Grades

Select Best liquoring FNGS1s appreciated Rs 10, while the Best and the Below Best were firm to dearer by Rs 5 to Rs 10, poorer sorts appreciated Rs 5. All BPs were irregularly dearer by Rs 10. Select Best and Best BMs were dearer by Rs 20 to Rs 25 and more at times, Best and the Below Best appreciated Rs 10, poorer sorts sold at firm levels. All Low Grown Fngs were irregularly dearer by Rs 5. Select Best and Best BOP1As appreciated Rs 10 to Rs 15 and more at times, Below Best and poorer sorts were firm on last.

Dust

Select Best Dust1s were firm, improved teas in the Best and Below Best category gained Rs 5 to Rs 10 whilst the balance and the poorer sorts declined Rs 10 to Rs 15. Clean secondaries were firm, whilst the Below Best types were irregularly lower, poorer sorts were firm. Best Low Grown Dust / Dust1s were firm, whilst the balance shed to Rs 10 to Rs 15. JKH tea repot

Asia’s largest Orthodox Tea Factory:

Galpaditenne ventures into CTC production

Galpaditenne Tea Factory situated in Lellopitiya in the Ratnapura District belongs to the conglomerate KDU Group and is owned by entrepreneur Saman Upasena. Galpaditenne is Sri Lanka’s biggest Orthodox Tea Factory with an annual production of approximately three million Kgs. One of the advantages, to both the factory and the producer is that the management deals directly with approximately 22000 smallholders who provide green leaf to the factory within a radius of 60 km, thus eliminating the middleman.

Galpaditenne Tea Factory has ventured into the production of CTC teas by installing a state-of-the-art line of CTC machinery which will enhance production by almost a million Kilograms bringing the total annual production of Black tea to 4.0 million Kgs.

The state-of-the-art factory, is equipped with some of the most modern machinery in the tea manufacturing process and is fully automated, to improve productivity, minimizing costs and more importantly making available a product under good hygienic conditions.

The factory development work that has been under taken, has also taken into consideration that those employed in the factory are ensured of receiving the maximum comfort and convenience at work.

To ensure that the factory delivers a quality product, strict quality procedures are laid out that are consistently monitored.

To assure the customers of the best quality tea in line with international standards, the factory has been accredited with ISO 2000:2005, CQC-QMS** Certification.

Renowned as Asia’s biggest Orthodox Tea Factory, the annual production of Galpaditenne Tea Factory easily exceeds some of the regional plantation companies in Sri Lanka comprising of six or more factories.

Tea production in July increases

The Sri Lanka Tea Board (SLTB) said that the total reported production of tea in Sri Lanka during July 2010 amounted to 26,407,101 Kg as against 25,851,896 Kg produced during the corresponding month in 2009.

This shows an increase of 555,205 Kg or 2.1 percent.

The total tea production during the period January to July 2010 amounted to 195,106,814 Kg as against 158,101,066 Kg produced during the corresponding period of 2009, shows an increase of 37,005,748 Kg or 23.4 percent.