Monday, October 3, 2011

John Keells Tea Market Report:

Low crop intakes from all elevations

With eight months of the year gone by, plantations have had no respite from the low crops and weak markets we have witnessed, particularly during the third quarter of 2011.

Although at recent Ex Estate sales, we have seen a slight revival in prices particularly for the BOPFs grade with Russia showing good inquiry, price levels for the Below Best and plainer teas continue to fall well short of current production cost.

The situation has been further aggravated with low crop intakes from all three elevations.

To give an insight to our readers of the present cost of production, most estates in the High Grown sector in the past three months have been averaging above Rs.450/- per kg whereas the sale averages have been in the region of Rs 300 incurring losses of around Rs 150 per kg and more. The recent production figures released by the Sri Lanka Tea Board for August once more records a shortfall of 8% compared to the corresponding period of last year with High and Medium Elevations recording shortfalls in excess of 20%.

Low Growns on the other hand has registered a 1% increase which is heartening to-note. The reports that we have had from plantations, suggest that even the September Crop would fall short of last year’s harvest of 25 mkgs.

Despite the crop shortfall we have witnessed in the second half of 2011, Sri Lanka’s to date production to end August records a marginal 0.80 negative variance over last year, and given a strong showing in the last quarter of the year, production could yet match up to last years all time record crop of 331 mkgs.

Last week’s lesser volume of 0.84 mkgs Ex Estate teas on offer met with better demand, particularly for the BOPFs grade. The sale commenced, firm to a little easier for Best High Grown BOP/BOPFs on offer and improved to be firm to dearer by Rs 10 to Rs.15 as the sale progressed. In the Below Best and plainer categories, BOPs were irregular whilst BOPFs once again strengthened as the sale progressed.

A few Nuwara Eliya BOP/BOPFs sold well, whilst the others were lower. The handful of brighter Uva BOP/BOPFs sold well although much lower to last week, others barely maintained. Low Grown CTC PF1s declined Rs.20/- to Rs.30/- on average, whilst High and Medium types too were a little lower.

The 3.4 Mkgs of Low Growns that were on offer this week, met with good demand, but at lower levels.

Some Middle Eastern markets were rather subdued, however the Russian buyers were quite active. The current Low Grown Averages are approximately 9% to 10% lower when compared with the same period of 2010.

Most Low Grown Planting Districts have reported very dry weather conditions with lower crop intakes.

Western Teas

Select Best BOPs were firm to irregular, other good invoices gained Rs 10, Below Best sorts advanced Rs.5, plainer varieties were firm to dearer. Select Best BOPFs were firm, other good invoices gained Rs.10 and more as the sale progressed, Below Best and plainer sorts too advanced Rs.10 to Rs.20 on average.

Medium BOPs were barely steady. BOPFs gained Rs 15 to Rs 20.

Nuwara Eliya Teas

BOPs declined Rs 10/- to Rs 20/- with a fair volume remaining unsold. BOPFs advanced substantially.

Uva Teas Bright BOP/BOPFs declined substantially following quality, other BOPs were barely steady.

BOPFs were firm to dearer. Uda Pussellawa BOPs were firm. BOPFs gained Rs 10 and more as the sale progressed.

CTC Teas

Low Grown PF1s declined Rs 20 and more with a fair volume remaining unsold. High and Medium PF1s declined Rs.10 and more. BP1s shed Rs 10 to Rs 20 on average.

Low Growns

Fair demand. Select Best OP1s were firm to Rs.5/- to Rs.10/- dearer, Best types were steady, Below Best and poor sorts were lower by Rs.5/- to Rs10. Select Best BOP1s shed Rs 5 to Rs 10, however Best types maintained last levels, Below Best and Poor sorts were irregularly lower by Rs 5 to Rs 10. Select Best OP/OPAs were steady, Best and Below Best types were lower by Rs 5 to Rs 10, Poor types declined sharply by Rs 10 to Rs 15. Select Best Pekoes maintained last levels, other varieties commenced the sale Rs 5 to Rs 10 per kg lower to previous week’s closing levels but gained Rs 5 to Rs 10 as the sale progressed.


Select Best along with the Best Pekoe1s eased Rs 5 to Rs 10 and more at times, Below Best and Poor sorts maintained last levels. Select Best BOP/BOPSPs shed Rs 10 per kg, Best types too were lower by Rs 10, Below Best and poorer sorts were lower to Rs 10 to Rs 15. Select Best and Best FBOP/FBOPF1s declined Rs 10 to Rs 15, Below Best types also lower by Rs 10 to Rs 15, poorer sorts too were lower by Rs 10. Select Best and Best Tippy varieties declined sharply on last levels, Below Best and poorer sorts were lower by Rs 20 to Rs 30.

Off Grades

Select Best and Best liquoring Fngs1s sold at firm levels, whilst the Below Best and poorer sorts appreciated by Rs 5. Select Best and Best BMs sold at firm levels, whilst the Below Best and poorer sorts depreciated by Rs 10 to Rs 15. All BPs depreciated by Rs 10. All Low Grown Fngs were lower by Rs 20 to Rs 25 and more at times. Select Best and Best BOP1As were firm to dearer by Rs 5 to Rs 10, however Below Best and poorer sorts eased Rs 10 to Rs 15 and more at times.
Dust Select Best Dust/Dust1s were firm. Improved teas in the Best and Below Best category gained Rs 5 to Rs 10, whilst the balance declined by a similar margin. Clean secondaries were firm, whilst the balance shed Rs 10 to Rs 15. Best Low Grown Dust/Dust1s were firm, whilst the balance were irregularly lower.
source - www.dailynews.lk

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