MARKET

John Keells Tea Market Report:

Good demand for Low Growns

With two more sales left to complete the year, it is almost certain, Sri Lanka’s tea production as well as sale averages will fall short of last year’s record year.

Tea production which registered a 331 mkgs last year is expected to decline by about six mkgs during the current year.

Even though the Tea Crop in the first quarter was high the subsequent drop in the output during the year was mainly due to extremes in weather conditions.

The failure of the South West monsoon too was a contributory factor.

As for prices, Sri Lanka tea averages for 2011 is also likely to fall short of last year’s average of Rs 370.61. The decline in prices during the year has been manifold with Low Grown in particular, which contributes 60% of the crop, having to contend, with the turmoil in the Middle East, one of the largest tea importing regions for Low Grown type teas.

Notably Libyan buying was extremely restricted.

Another feature for poor prices in 2011 was the limited seasonal teas on offer from both the Western and Uva regions.

Quality from these two regions was well below expectation due once again to unseasonal weather.

Last week’s Ex Estate market comprising of 1.28 mkgs of teas met with fair demand. Select Best Western High Grown BOP and BOPFs sold well following quality, whilst the others along with the Below Best commenced firm to irregular following quality however, declined as the sale progressed.

A few brighter Nuwara Eliya BOPs appreciated Rs 5 to Rs 10, others were firm. A few brighter BOPFs too sold well, others were firm to a little lower. Uva BOP and BOPFs were firm to easier.

The best Low Gown CTC PF1s were firm to irregular, others were firm to lower. High and Medium types too were of a weaker market declining Rs 10 to Rs 20 with a fair weight remaining unsold.

The 3.2 mkgs of Low Growns that were on offer last week, met with very good demand. The depreciation of the rupee, with the impending Christmas holidays coupled with only three auctions in the month of December could be attributed to the enhanced demand at the Colombo Auctions.

Most Middle Eastern markets were quite active with good Russian interest.

Western Teas

Select best BOPs declined Rs 15 to Rs 20, other good invoices were firm, below best sorts declined Rs 5 to Rs 10, plainer varieties were irregular. Select best BOPFs advanced following quality, other good invoices gained Rs 10 to Rs 15, below best sorts were firm to Rs 10 easier, plainer varieties eased Rs 5 to Rs 10 as the sale progressed. Medium BOPs were irregular. BOPFs shed Rs 10 on average.

Nuwara Eliya Teas

BOPs gained Rs 10 to Rs 20, whilst BOPFs were firm to dearer.

Uva Teas

Select best BOPs were firm, others eased Rs 10. BOPFs shed Rs 10 on average. Uda Pussellawa BOPs were irregularly lower. BOPFs declined Rs 5 to Rs 10.

CTC Teas

Select best Low Grown PF1s were firm, others declined Rs 10. BP1s were irregular. High and Medium PF1s declined Rs 15 to Rs 20. BP1s shed Rs 10 to Rs 15 on average.

Low Growns

Good demand. Select best OP1s gained Rs 5 to Rs 10 whilst the best types were steady, clean below best types gained Rs 5 to Rs 10, however the balance eased by a similar margin. Select best BOP1s appreciated Rs 10 to Rs 20, whilst the best types maintained last levels, below best types gained Rs 5 to Rs 10, poor types were mainly firm. Select best OPs shed Rs 20 to Rs 30, best types were irregularly lower by Rs 5 to Rs 10, below best and poor sorts were steady. Select best OPAs appreciated Rs 10 to Rs 20 and more at times, the balance were firm to Rs 3 to Rs 5 lower following quality. Select best Pekoes appreciated Rs 30 to Rs 50, the balance too commenced the sale by Rs 5 to Rs 10 dearer and advanced by Rs 10 to Rs 20 as the sale progressed. Select best Pekoe1s gained Rs 10 to Rs 20, the best types were fully firm, however the below best types were irregular following quality, poor types were firm. Select best BOP/BOPSPs maintained last levels, best types advanced Rs 5 to Rs 10, below best and poorer sorts were firm.

Select best FBOPs were firm to dearer at times, best varieties moved up Rs 5 to Rs 10, below best and poorer sorts were irregularly lower to last. Select best FBOPF1s were firm, best types moved up Rs 5 to Rs 10, below best and poorer sorts met with irregular demand.

Select best and best Tippy sorts met with good demand and advanced above last, below best and poorer types met with irregular demand.

Off Grades

Select best and best liquoring Fngs1s depreciated Rs 5 to Rs 10, whilst the below best and poorer sorts were lower by Rs 10. Select best and best BMs were dearer by Rs 10, whilst below best and poorer sorts were firm to dearer by Rs 5. All BPs were irregularly dearer by Rs 5. All Low Grown Fngs appreciated by Rs 10. Select best BOP1As along with the best types were firm to dearer by Rs 10, below best along with the poorer sorts were firm to dearer by Rs 5.

Dust

Select best Dust1s were firm, whilst the best Dust1s declined Rs 5 to Rs 10, below best Dust1s and the balance appreciated Rs 5 to Rs 10, but declined Rs 10 to Rs 15 towards the latter part of the sale.

All secondary Dust/Dust1s appreciated Rs 10 to Rs 15. Best Low Grown Dust1s were firm, whilst the balance appreciated Rs 5 to Rs 10.