Monday, October 18, 2010

Russia and Iran continue to sustain Ceylon Tea

By Steve A . Morrell

John Keels Tea market report last week indicated sustained support for Ceylon tea. Good news all round within context for comparative increased production comparing 2009, the disaster year all would prefer to forget. The report also said Iraq, Dubai, Syria, Saudi Arabia, and other Middle Eastern countries also lent support.

The report also said Japan, UK, and Continental buyers were selective. Indications were although low growns continued to dominate production and sales, Western High growns on offer too had clientele clout. Perhaps an augury for future progress from that elevation and that things were not too bad, all told.

Could this be turn around factor the industry was awaiting? Some sources came up with this pithy remark, ‘Don’t hold your breath’. But reality was salutary results from high elevation teas both in production and sales were promising. Reality of current production dipping was temporary but the holistic picture was one of optimism. Not least realization of Sri Lanka Tea Board predictions, earlier this year that the 1.3 billion Dollar export target could be surpassed .

Colombo Tea auction averages for the week comparatively dampened euphoria. Last year the same week average was Rs. 407.39, this year the same week details recorded Rs.370.99; clearly drop in prices, but Brokers said this was not cause for panic. There were other factors, particularly reduced European buying, but that was temporary.

To allay any fears that all was not well in the Industry they said ‘Compare to-date results.’ We did. Sales averages now were recorded at Rs.367.37 per kilo. Last year it was Rs. 355.39. However comparing Dollar cents re- valuation of the Rupee had it that this year it was slightly low.

We reported last month auction sales of Green tea but Brokers reports did not indicate such sales were part of auctioned volume. We were not informed reasons for such exclusion.

Meanwhile Asia Siyaka Weekly Tea market report contained information that Production in Kenya recorded 30 % increase comparing 2009. Conversely India, the report said declined 21.4 % in August this year. Quoted from reports originated from the tea board of India results were that Tea exports dipped nearly 28 % . Indian Rupee value was about Rs.227.06 crore.

Sri Lanka recorded production increases of about 39.39 million kilos.

Crop offerings at the weekly auctions last week were 6.5 million kilos. This week too the 6 million mark would not be surpassed. This week 6.7 million kilos will be on offer.

New Panilkanda in the Deniyaya sub District recorded top prices of Rs. 3540. Per kilo for their Flowery Broken Orange Pekoe Fannings Special, FBOPF Sp, at last sale. A leafy grade. Similarly there were other selected marks too that realised such prices. All low growns.

Of the mediums, Craighead, in Dolosbage, Imboolpitiya in the Nawalapitiya basin, and Velai Oya in the deep recesses of the Hatton hills were top sellers realizing approximately Rs. 500 per kilo.

Of the Nuwara Eliyas, Tommagong, and Court Lodge were top sellers with prices of about Rs.600. per kilo.

In the Western Hills Kirkoswald in the Bogowantalawa Valley, Bambarakelle in Talawakelle, and Mattakelle on the TRI border were top sellers.

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