11/01/2009 - With weather returning to normal global tea supply could over shoot demand.
And that may cause serious concern to tea producers and sellers world wide.
We quoted a Food and Agriculture Organization (FAO), report last week on the specter of over supply, Asia Siyaka research report this week indicated much thee same facts.
Secretary FAO's Inter-Governmental Group on Tea, the only international Tea Authority, Kaison Chang, said return to normal weather in main producing regions indicates tight global markets should ease alleviating pressure on world tea prices in 2010.
End November exports Sri Lanka have had significant financial plus signs although crop failure did make its impact. Market progression compensated for poor crops and have now resulted in profit at most production points except the Corporate sector.
However some (two corporate holdings) Regional Plantation Companies have turned round and now in the blue bottom line category.
Although world production projections indicate over production, crop down turn in Sri Lanka would need some soul searching and remedial action and consideration this year. More so as reported by us Mid December last year, to cater to 'specialty tea' demands improvement in crop intakes would need singular effort..
Prime export countries did not change their order. Indications are that new markets were not pursued. Alarm bells have begun to toll dirge clangs because traditional buyers particularly Russia or CIS countries are now looking else where for their tea needs.
There are now 13 main country destinations who purchase our tea regularly in appreciable quantities. But dire news is that its declining and they are looking else where for their tea supplies. Reasons attributable are that Ceylon Tea is costly.
However there seems to be a slim silver lining. Ceylon Tea drinkers have built an addiction syndrome and although demand is declining traditional buyers still demand Ceylon's.
Brokers reported a bullish market last week. Western quality surfacing over the next few weeks and dormant Winter production in North India would auger well for Ceylon Tea the next two months at least.
Prices may hold but increasing production would need to be looked at.
Meanwhile the Iran factor was not quoted recently. Direct sales were suspended subject to the credit squeeze imposed through UN sanctions. However that would not stop Iran imports because of back-door purchases Through Turkey, for instance, and two other sources who ensure Iran get their tea. This may be considered an open secret.
Prices at Estate level showed stability. At Western High grown hills Matakelle did well selling BOP @ Rs.430. per kilo. Similarly Adisham, in Hatton, Laxapana, in Maskeliya, Brunswick, also in Maskeliya, and Glentilt all within the same topographical range of hills in and around the Mousakelle reservoir, all had had good prices last week..
Approximately 7.4 million kilos were on offer at the auctions last week. Brokers described the sale as good for the first sale of the year. More good sales would follow this week they said. 7.8 million kilos would be on offer this week
Market predictions are good Brokers said.
By - Steave A morrel
source - www.island.lk
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