Monday, April 12, 2010

Sri Lanka - News from Comobo Tea Auctions.

By Steve A. Morrell

Black orthodox teas declined by last week approximately Rs. 20 to Rs.30 per kilo. CTCs picked up increasing in value about Rs30. per kilo. Notable though such declines were, general conditions for CTC (Cut Twist & curl) were yet described buoyant.

Last week too quantities were significantly low at just about 6 million kilos.

Low grown Leafy categories sold well. Although at some 2.6 million kilos, in quantity low elevation tea were in demand.

However, brokers said producers were cautioned that influx of heavy crops expected after the New Year break, harvested leaf should be at acceptable levels. At that time glut conditions would prompt buyers to be selective and those reported at sub standard levels would be discounted.

Last week we reported high priced BOP fetched astronomical prices; but at last weeks auction the same garden mark did not do quite that well. Reasons attributed were end of seasonal teas, and expected general elections. This week too may not be quite that phenomenal.

Noteworthy though it is fact low growns continue to dominate production. As indicated last week low grown production mainly concentrated on effectivity of small holders; the question that now begs tangible answer is how effective are Regional Plantation Companies increasing production.. We already have feedback that cultural practices were observed more in the breach than on time.

Last week we also had discussions with senior personnel connected with the industry, who said under State management land was effectively cultured and such inputs were effected in time. More so replanting programmes adhered to the tea commissioners directives. of 2 % areas in production. Such reminiscences were only historical fact, these sources said. Present RPC re-planting did not exceed 0.50%.

Ceylon Tea Brokers Ltd. said in their weekly tea market report that Kenyan production is billed to rise this year. Kenya already the highest tea producer globally, will further increase production, indicating they have recovered from the 2009 debacle projecting further improvement.

We quoted Tea Board Chairman Lalith Hettiacachchi about two weeks ago that he was optimistic Sri Lankan Tea production would be back on track and this year’s production would surpass 2009 figures. Given present cropping trends in low grown elevations, this would seem possible. But how much would RPCC contribute was left in the balance.

We are aware three Regional Plantation Companies have moved ahead and are making profits. Those few who have moved out of the traditional plantation management cocoon and are proverbially out of the box.

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