High production cost, depressed prices affect tea
Crops from the Western and Eastern sector are yet to show any significant signs of improvement and continues slightly below last year levels, and along with recent wage hike is keeping cost of production at its highest ever levels.
The last quarter of the year is normally associated with high crops, and producers will hope that things will turnaround fast, as most of the plantations from these two sectors have suffered heavy financial losses in recent months, due to a combination of high production cost and depressed prices.
However, from the point of view of the world supply and demand, there is no pointer towards improved prices.
Uva quality season this year has been somewhat disappointing with only a solitary estate recording a price of Rs 1000 so far. One could argue that climatic conditions were not suited for the manufacture of Top quality.
The South West Monsoon which was a failure at the commencement, has been re-activated, and rain is now falling regularly. The water levels of the near empty hydro power reservoirs are now rising.
The Eastern sector has been experiencing showers over the weekend which could be a precursor to the onset of the North East monsoon.
The wet weather will bring to a close the seasonal teas from this sector.
The drop in tea prices in the month of August has affected the Sri Lankan averages for the month with an overall negative variance of Rs 20.87 compared to same period last year.
All three elevations recorded negative variances with Low and Medium grown in particular recording minus variances of Rs 23.56 and Rs 18.50 respectively.
At the auction this week, there was good inquiry from Russia for western BOPF, the better BOPs and CTC PF1.
However, the poorer western BOPs along with CTC BP1s were neglected. The BOPF grade is currently obtaining a premium of around Rs 50 - Rs 70 over the BOP in the below best and plainer categories but a smaller premium is evident at the top end.
The poor BOPs do not attract much buyer interest, and often remain unsold. Prices for Uva teas declined across the range of teas, and “Air mail” bids were very few. Only two estates secured prices in excess of Rs 500.
The 3.5 mkgs of Low Growns that were on offer last week, met with a very similar market to previous.
Most well made teas maintained. Prices at the bottom end of the market once again declined further.
A clear indication that most markets are short of well made teas, hence producers should strive to concentrate more on quality than quantity.
Western Teas
Select Best BOPs advanced Rs 10 to Rs 15, other good invoices were firm, Below Best sorts eased Rs 5 to Rs 10, plainer varieties were firm. A few Select Best BOPF advanced Rs 10 to Rs 15, other good invoices declined Rs 10, Below Best sorts were firm and eased as the sale progressed, plainer varieties were firm to dearer. Medium BOPs were firm to dearer. BOPFs were firm.
Nuwara Eliya Teas
Nuwara Eliya BOPs were firm to dearer. BOPF were irregularly dearer.
Uva Teas
Brighter BOPs declined Rs 40 to Rs 50, others shed Rs 10 to Rs 15. Bright BOPFs eased Rs 10, other good invoices declined Rs 10 to Rs 15 on average. Uda Pussellawa BOPs declined Rs 5 to Rs 10. BOPF shed Rs 10.
CTC Teas
Select Best Low Grown PF1s were firm, others declined Rs 15 to Rs 20 on average. BP1s were substantially lower. High and Medium PF1s declined Rs 10. BP1s shed Rs 15 to Rs 20 on average.
Low Growns
Fair demand. Select Best OP1s appreciated Rs 20 to Rs 30, however the Best types declined Rs 10 to Rs 15, Below Best types along with the poor sorts declined sharply and were mainly un-saleable due to lack of sufficient bids. Select Best and Best BOP1s shed Rs 30 to Rs 50 and more at times, Below Best and poor sorts were irregularly lower by Rs 5 to Rs 10. Select Best OP/OPAs appreciated Rs 5 to Rs 10, well twisted Best varieties too were dearer by a similar margin, however Below Best and poor sorts eased Rs 5 to Rs 10 Select Best Pekoes gained Rs 20 to Rs 40, bold Pekoe varieties commenced on firm levels however advanced by Rs 5 to Rs 10 and more as the sale progressed, flaky types were firm to Rs 5 to Rs. 10 dearer. Shotty Pekoe1s gained Rs 10 to Rs 20, however the Best types shed Rs 5 to Rs 10, Below Best and poor sorts were steady. Select Best and Best BOPs maintained last levels, Best types shed Rs 10 per Kg. Below Best and poor sorts were easier by Rs 10 to Rs 15. Select Best and Best FBOPs were lower by Rs 10 to Rs 15, Below Best and poor sorts too were lower by a similar margin. FBOPF1s declined Rs 10 to Rs 15. Select Best and Best Tippy varieties were much lower to last, Below Best and poor sorts too declined on last levels.
Off Grades
Select Best and Best liquoring Fngs1s appreciated by Rs 10, whilst the Below Best and poorer sorts were dearer by Rs 10 to Rs 15. Select Best and Best BMs appreciated by Rs 10, whilst the Below Best and poorer sorts depreciated by Rs 10 to Rs 15 and more at times. All BPs sold at firm levels. All Low Grown Fngs eased by Rs 10 to Rs 15. Select Best BOP1As along with the Best were firm to dearer by Rs 5 to Rs 10, however Below Best shed Rs 10, whilst poor sorts eased Rs 15 to Rs 20 with very low demand.
Dust
Select Best Dust1s appreciated Rs 5 to Rs 10, a few improved Dust1s in the Best category were firm whilst the balance and poorer sorts declined Rs 10 to Rs 15 and more at times.
Clean secondaries shed Rs 5 to Rs 10, whilst the balance declined further. Best Low Grown Dust/Dust1s gained Rs 5 to Rs 10 whilst the balance eased Rs 10 to Rs 20.
source - www.dailynews.lk
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