By Steve A. Morrell
All predictions were on track. Asia Siyaka Weekly Tea Market Report (AS), quoting Customs data released last week said, tea export earnings reached US$ 1.12 billion during the first ten months of this year. Ceylon tea held its edge internationally and its reputation for producing an outstanding product had not waned. Although Sri Lanka still languishes at level three in real production quantities, India and Kenya placed 1st and 2nd, earnings from tea have proved to be substantial, broker said.
With value added tea exports gaining momentum brokers said future prospects did not look ‘too bad’. AS said last week value addition to end October was 62 %. Lowest on record was 2002 accounting for 35 %. 1996 was the next highest on record at 46 %.
Contrary to expectations that the market would simmer at previous levels, given the end of winter buying, last week’s performance at the auctions was phenomenal, brokers pointed out.
John Keels Holdings (JKH) Tea report last week said: ‘The markets during the December sales were expected to be quiet, given balanced supply and demand situation around the world, and as demand from CIS markets was expected to improve only in January; what transpired at the Ex- Estate sale last week for High growns and Mid growns was totally the opposite’.
The report said there was a frenzy of bidding for both BOP and BOPF grades with the market improving at all levels. ‘Christmas cheer and the festive mood prevailed in the auction room’, the report said Some BOPs advanced Rs. 50. BOPF Rs. 15.
According to the AS report, export earnings at Rs. 127.6 billion, was an increase of 15 %. The previous record was Rs. 118 Billion.
However, apart from CIS countries, and the Middle East accounting for greater absorption of Ceylon Tea, we have had no tangible export increases to most European countries and the US. Broker’s reports did not give us positive feed back on new markets.
Production figures of most producing countries indicate Sri Lanka at plus variance of about 38.76 million kilos. Apart from Bangladesh, North India, and Indonesia, all other producing countries are ahead in crop, comparing 2009. Kenya recording the highest at about 76. 62 million kilos.
Last week auction offerings were low at 6.1 million kilos. This week quantity on offer will be 7.1 million kilos.
Weather conditions in the hills continue to be wet. But Expectations are that dry cold nights in December and January could herald a good Western quality season and present price trends would continue.
source - www.island.lk
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