By Steve A. Morrell - Tea prices marginally down but could this be arrested?
That is the question. Could decreasing prices be arrested at the Colombo auctions? Brokers said presently there was no need to scamper to panic stations or stoke some mysterious mambo jumbo that caused unidentified phenomenon in price reduction. True performances last week were no better than previous week’s accomplishment. Brokers were confident the price snag was temporary and should not cause nail chewing. At least not just yet. They said 2010 started on positive projectile and there was every reason to believe the price table would be sustained and perhaps moved up.
Gross sales prices this year indicated in the weekly tea market report from Lanka Commodity Brokers Ltd., placed price levels at Rs.386.69 to date. 2010 The same period last year was Rs.291.12. very nearly 100 percent in the plus variance category.
Prices are, therefore, good.
Crop increases last month were attributed to increased production by low growns and the Tea Small holder sector. High growns and Westerns although they showed improvement they were just about nose level.
Graphical indicators included in the Asia Siyaka Tea Market report was that low grown performance was at 65%. High growns at 22 %, and mid-growns at 15 %. Mid-growns mostly were State-Owned, but factually that did not spell progress.
Quite within context, our information was that management of these holdings has not changed to more updated dynamism. More aptly these State holdings are managed as stop - gap entities which purportedly did not merit funding for improvement
Attributing such sparse investment to this sector, 15 % crop improvement is not quite that bad.
Marginal Tea lands in Matale, and Nawalapitiya sub districts, we are informed are under State management.
Last week quantity on offer was 7.6 million kilos. This week it would be 7.2 million kilos decidedly drop of about 0.4 million kilos. Attributed reasons were that there was no rain in all planting districts.
Last week we had had some here -say from Dubai that they too were exporting tea.
This week we have more positive information that what we said last week was true. (Courtesy Lanka commodities Brokers,)
The Dubai Tea Trading Center (DTTC), announced that the Dubai Multi Commodities Center (DMCC), announced record 7.5 million kilos traded through the center last year.
The DTTC trade volumes at 26 % improvement, could possibly spell disaster to the Sri Lanka import and re-export market.
Last year 's debacle in financial circles were largely attributed to poor money circulation and also that Banks were not lending. Revenue levels too were affected. Irrespective of poor management of the situation, there was trade in that sector, but drop in revenue was significant.
This year todate however the import- export trade would pick up. We now see positive impact of a stabilized situation, which augers well for the industry.
source - www.island.lk
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