Tea begins year well, but weather would spoil things

By Steve A. Morrell

First two auctions for the year had some positive price indicators but Brokers’ were not quite that enthusiastic on price gains. Main pre-occupation however was the weather, and incessant rain with cold winds prevented normal routine. Some Estates reported extremely poor worker turn- over. There were also instances where weather conditions were so bad that workers did not report to work causing shut down, a day or two.

Comparative auction prices however were promising. John Keels Holdings (JKH), Tea Market report indicated to-date Dollar cent prices at higher levels comparing last year the same period.2011 average at 349 Dollar cents was higher than last year average at 338 D cents. Similarly, Rupee levels too had positive space levels. Rs. 390.59 to-date this year and last year price recorded the same period was Rs. 387. 55

Jump –off levels were promising these reports said. Bad weather would ease after Tai – Pongol; and expectations for quality weather were high. Perhaps late, this season but better prices would not be ruled out Brokers’ said.

Meanwhile gleanings from Asia Siyaka (AS) Brokers’ report had details of Kenyan exports where pointers were that markets captured from Sri Lanka, were yet operative; and gained in strength. Egypt, Pakistan, and the UK were our main market losses. Egypt absorbed 21.15 %, Pakistan, 16.88, and UK, 16.77.

Ceylon Tea exports to CIS countries, and parts of the Middle East were sustained, but hardly dented forays into newer markets. However value added exports gained in the short run with increases recorded late last year at around 60 %.

There are now newer players in market contention for foreign market share and this is positive, and could have salutary implications. They are Dilmah, Mlesna, Heladiv (the new competitor), Cinnamon Black and Cinnamon Green. Doubtless, interesting times ahead and the Minister Plantation Industries, Mahinda Samarasinghe’s vision is progressively becoming reality. Immediately he took over he spelt out his priorities which was value addition for exports.

However value addition has not effectively dislodged demand for Low quality South American Tea imported to the USA. That could be the focus in the new year, Tea sources said.

Capturing the US would be a major cost operative possibility, but questions raised were, is the US that important? Other parts of the world, yet unexplored, could be considered. But in this instance too doubts would need clarification. Consequential inquiry was ‘Who would give leadership?’ The Ministry? The Tea Board?,( We have a corporate person heading the Tea Board now), who else could come aboard, were speculative possibilities that need distinct answers.

The AS report also had pointers on competitive beverages that could run in concurrent competition to Ceylon Tea. Coffee Arabica sold at 547 dollar cents but Colombo auction prices for tea had an average price of about 339.80 dollar cents. Mombasa 251. 80, Kolkota, recorded 516.60.

Comparatively Colombo was a prosperous auction center, but progressively expensive. Cocoa too came into the equation, but at 306.00 D cents, and given exportable quantities could hardly be attributed a competing factor to Ceylon Tea. At least market sources think so.

At last weeks auction price gainers included Maha Eliya, in Nanu Oya, recording SLR 510. For FBOP, Flowery Broken Orange Pekoe. Matakelle, bordering the TRI, Lippakelle, in Lindula, Moray Glentilt, and Brunswick, in Maskeliya, were all best sellers for that elevation, Western High growns.

 source - www.island.lk