John Keells Tea Market Report:

Fair demand for Low Growns

Many in the industry are disappointed with the tea market at present. When looking at price levels, one could observe that at the beginning of August, the averages for Western High and Medium Grown Orthodox Teas as well as Low Grown Orthodox teas, were at around the levels of the corresponding sale of last year.

Thereafter, the gap widened, with the averages of last year August sales advancing steadily but the averages during the past few sales declining progressively for Western teas and Low Growns staying irregular, but which should show a lower average for the current sale.

The demand which is customarily high during August each year has been dismal this year. Seasonal buying which is evident usually at this time of the year, had been wanting. When evaluating the situation, many issues emerge.

The quality of Western high grown teas, has been below expectation, with buyers sometimes unable to quote for the best standards. Russian winter buying has not gathered momentum as yet.

The Ramazan period during which time the activity from Middle Eastern countries in particular, is curtailed. The situation in Syria, Libya and Iran, which has resulted in delays, in the flow of funds. CTC teas have been selling well below comparable levels of last year. Uva estates were unable to produce top quality due to irregular weather, but the few reasonably good teas are at present commanding satisfactory prices.

In the immediate future, one could expect erratic but a slight upward movement for Low grown teas. The strength would be from Russia and other CIS countries. There is currently demand for tea from the Middle East, but buying will be as and when funds flow into the country, thus causing an irregular market.

The volume at the weekly auction will also influence the price level. In respect of Medium and High elevation teas, good quality will be the only way out.

Quality must be at a level that differentiates Ceylon Tea from orthodox teas from other origins.

Western High Grown estates are experiencing warm and sunny conditions after a brief spell of wet weather.

On the Eastern sector conditions continue to be extremely dry with night temperatures being less cold which is somewhat unusual for the time of year.

Crops have eased from these two sectors. With little signs of a change in the weather we do not expect to see a significant improvement in production in the first fortnight of September.

On the other hand Low Grown has had more conducive weather for growth and crops from this sector are expected to show a slight improvement in the coming weeks.

Last week’s Ex Estate weight of 1.0 mkgs of teas on offer met with fair demand. Better Western BOPs were barely steady, whilst the Below Best sorts were irregularly lower.

Plainer varieties were firm to dearer.

The Western BOPFs followed a similar trend, with better Western BOPFs at Rs 5 to Rs 10 lower.

There was better demand for the Nuwara Eliya BOP/BOPFs which appreciated Rs 15 to Rs 20 at last week’s sale.

The few Uva BOPs which had seasonal character sold above Rs 400 with the Best on offer selling between Rs 750 to Rs 940 at last week’s sale.

BOPFs maintained last week’s levels for the best on offer, whilst the plainer teas being barely steady.

Select Best Low Grown CTC PF1s continued with good demand appreciating Rs 10 to Rs 15 with the top end now selling in the range of Rs 570 to Rs 600, others however declined Rs 10 to Rs 15 on average.

High and Medium types too were Rs 10 to Rs 15 dearer, whilst the brokens appreciated by Rs 5 to Rs 10. There was fair demand for the 3.2 mkgs of Low Growns that were on offer this week, slightly at lower levels to last. Select best BOP1/OP1s eased Rs 5 to Rs 10, whilst the balance were firm. Well made OP/OPAs sold at firm levels, however the below best and poor varieties shed Rs 5 to Rs 10. Pekoes were barely steady.

In the Small Leaf category, BOP/BOP.SPs declined Rs 10 to Rs 15. FBOP/FF1s too were lower by Rs 10 to Rs 15. Best Tippy varieties were substantially lower to last, below best and poor sorts shed Rs 10 to Rs 15.

Western Teas

Select Best BOPs declined Rs 10 and more, other good invoices were firm to easier, Below Best sorts declined Rs 5 to Rs 10, plainer varieties were firm to dearer. Select Best BOPFs eased Rs 5 to Rs 10, other good invoices were firm, Below Best sorts were firm to Rs 5 easier, plainer varieties maintained. Medium BOPs advanced Rs 10 to Rs 15. BOPF were irregular.

Nuwara Eliya Teas

Brighter BOPs advanced Rs 10 to Rs 15, others were firm to dearer. BOPFs gained Rs 15 to Rs 20 on average.

Uva Teas

Brighter BOP/BOPFs sold well on special inquiry, others declined Rs 5 to Rs 10. Uda Pussellawa BOPs were marginally dearer. BOPF gained Rs 10 on average.

CTC Teas

Select Best Low Grown PF1s advanced Rs 10 to Rs 15, others declined Rs 10 and more. BP1s advanced Rs 10. High and Medium PF1s gained Rs 15 to Rs 20. BP1s advanced Rs 10.

Low Growns

Fair demand. Select Best OP1s eased Rs 10 to Rs 15, Best types too were lower by a similar margin, clean Below Best types maintained last levels, however the balance shed Rs 5 to Rs 10. Select Best BOP1s shed Rs 5 to Rs 10, Best types were steady, clean Below Best varieties gained Rs 5 to Rs 10, others were lower to last.

Select Best OP/OPAs advanced sharply by Rs 50 to Rs 70, Best types were irregularly dearer by Rs 5 to Rs 10, Below Best were firm, poor types tended lower by Rs 5 to Rs 10. Select Best Pekoes declined sharply by Rs 30 to Rs 50, bold Pekoe varieties too were lower by Rs 5 to Rs 10, flaky types were firm. Shotty Pekoe1s shed Rs 20 to Rs 30, Best types too were lower by Rs 10 to Rs 15, Below Best and poor sorts were steady.

Select Best and Best BOP/BOP.SPs declined Rs 10/- and at times more, Below Best and poorer sorts were lower by Rs 10 to Rs 15. Select Best FBOP/FBOPF1s were lower by Rs 10 to Rs 20 and at times more, Best types too shed Rs 10 to Rs 15, Below Best and poorer sorts were lower by Rs 10 to Rs 15. Select Best and Best tippy varieties declined on last levels, Below Best and poorer sorts too shed Rs 10 to Rs 15.

Off Grades

Select Best and Best liquoring Fngs1s were lower by Rs 20 to Rs 25, whilst the Below Best and the poorer sorts depreciated by Rs 10 to Rs 15. Select Best BMs sold at firm levels, Best , Below Best and the poorer sorts eased by Rs 15. All Low Grown Fngs depreciated by Rs 10. All BPs sold at firm levels.

Select Best and Best BOP1As were firm to dearer by Rs 5 to Rs 10, however the Below Best BOP1As declined from last weeks levels by an average of Rs 5, poorer sorts too were easier by Rs 10 to Rs 15 with a lower demand.

Dust

Select Best Dust1s appreciated Rs 5 to Rs 10, whilst the Best Dust1s declined Rs 10 to Rs 15, others and poorer sorts shed Rs 20 to Rs 30.

Clean secondaries were firm, whilst the balance shed Rs 10 to Rs 15 Best Low Grown Dust/Dust1s eased Rs 5, whilst the balance were irregularly lower.

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