Friday, April 22, 2011

John Keells Tea Market Report: Rise in world tea consumption to keep prices high

The Auction commenced after a break of one week due to the traditional Sinhala and Tamil New Year Holidays.


In the first three months of 2011 prices at the Colombo Auction seemed to be holding up and even increasing over 2010 averages which recorded an all time high.

For the period, January 1 to end March 2011 the national average of Rs 393.92 is the highest on record for a first quarter of any given year exceeding the previous best of Rs 382.90 recorded last year.

World tea prices are expected to remain moderately high in 2011 due to the rise in world tea consumption and sluggish world tea production.

China and India with their large population and growing income levels will make a contribution to the rise in the world tea consumption.

These two countries with their increasing populations will contribute to increase local consumption of tea thereby reducing their exportable surplus. Indications of output figures for 2011, suggest a global fall, with Kenya and Sri Lanka not expected to maintain 2010 record levels.

All major producing countries including India have recorded shortfalls in 2011 to end February which could increase demand in 2011.

The latest amended tea production for Sri Lanka in 2010 as released by the Tea Board is 331.4 mkgs.

Despite the large volume of 1.4 mkgs of Ex Estate teas on offer and considering the quality which was somewhat lower, prices were fairly stable.

A few good Western invoices where the product quality was reasonable and differentiated from the rest, sold in excess of Rs 400 supported by special inquiry and airmail bids. The bulk of the teas sold between Rs 350 to Rs 370 on average.

Nuwara Eliya's however, continued to maintain its edge over most of the Westerns with good prices being registered for grades such as PEKOE1 and FBOPs which sold in excess of Rs 500. Uva's followed a similar trend of the Westerns.

The top end Low Grown CTC's were firm to a little easier, whilst the balance declined Rs 10 to Rs 15 on average.

High and Medium types too although met with good demand were irregularly easier.

The 3.6 mkgs of Low Growns that were on offer this week met with very good demand.

It was encouraging to see Libyan buying and also strong Iranian buying after their New Year break. Russia too was quite active with the Syrian buyers purchasing quite aggressively.

Other than for the Best OP1s on offer, all others were fully firm, if not dearer.

Western Teas

Select Best BOPs advanced substantially following quality, other good BOPs shed Rs 10. Below Best sorts were firm to easier, plainer varieties were firm to Rs 5 lower. Select Best BOPFs eased Rs 20 to Rs 25, other good invoices shed Rs 10 to Rs 15. Below Best sorts were firm to irregular. Plainer varieties were firm to Rs 5 lower. Medium BOP and BOPF were Rs 10 to Rs 15 easier.

Nuwara Eliya Teas

Brighter BOPs declined substantially following quality, others shed Rs 10 to Rs 15 and more. BOPFs declined Rs 10 and more at times.

Uva Teas

BOPs were firm to Rs 5 easier whilst the BOPFs declined Rs 5 to Rs 10 on average. Udapussellawa BOPs shed Rs 15 to Rs 20 whilst the BOPFs eased Rs 5 to Rs 10.

CTC Teas

Low Grown PF1s declined Rs 15 to Rs 20 and more. BP1s gained Rs 10 to Rs 15. High and Medium PF1s advanced Rs 10. BP1s shed Rs 5 to Rs 10 on average.

Low Growns

Good demand. Select Best OP1s were irregularly lower by Rs 5 to Rs 10, the balance declined Rs 10 to Rs 15 following quality. Select Best along with the Best BOP1s were firm to Rs 5 to Rs 10 dearer, Below Best and poor sorts were barely steady.

Select Best OPs along with the improved Below Best were firm to Rs 3 to Rs 5 dearer, however others were irregularly lower by Rs 3 to Rs 5.

Select Best and Best OPAs appreciated Rs 5 to Rs 10, the balance were steady. Select Best Pekoes tended lower by Rs 5 to Rs 10, however the balance were firm to Rs 3 to Rs 5 dearer.

Select Best Pekoe1s gained Rs 5 to Rs 10, the Best types along with the Below Best varieties maintained last levels, flaky types gained Rs 5 to Rs 10 and more at times. Select Best and Best BOP and BOP.SPs advanced Rs 5 to Rs 10, Below Best and poorer sorts were lower by a similar margin.

Select Best and Best BOP1s advanced Rs 5 to Rs 10. Below Best types met with irregular demand particularly for the bolder types.

Poorer sorts shed Rs 5 to Rs 10. Select Best and Best FBOPF1s advanced Rs 5 to Rs 10. Below Best and poor sorts were lower by a similar margin. Select Best tippy varieties met with good demand and advanced above last.

Best and Below Best types were irregularly lower to last. Poor sorts were lower by Rs 10.


Off Grades

Select Best liquoring Fngs1s were dearer by Rs 5 to Rs 10 whilst Below Best and poorer sorts appreciated by Rs 5 to Rs 10. Select Best and Best BMs appreciated Rs 5 Rs 10 whilst poorer sorts were dearer by Rs 10 from last levels with good demand.
All BPs appreciated Rs 10. All Low Grown Fngs were dearer by Rs 10 and more at times. Select Best BOP1As were on firm levels, Best and Below Best gained Rs 10, poorer sorts were firm to dearer by Rs 10 to Rs 15.

Dust

Select Best Dust1s were firm whilst the Best Dust1s declined Rs 20 to Rs 30, Below Best types shed Rs 5 to Rs 10 whilst the poorer sorts were irregular. Clean secondaries were firm whilst the balance appreciated Rs 5 to Rs 10. Best Low Grown Dust and Dust1s declined Rs 10 to Rs 15 whilst the balance appreciated by a similar margin.

source - www.dailynews.lk

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