ECONOMYNEXT – Sri Lanka tea prices continued to dip apart from Pekoe teas with Low Growns and some High Growns showing good demand, however a drop in quality was seen, market participants said.
Low grown teas were doing well in price, whereas volumes were a bit static, brokers said.
Traders also said that very best teas had taken a hit owing to a price correction with persisting demand.
Sri Lanka sold 6.5 million kilograms of Ceylon tea with 0.9 million kilograms of Ex-Estate tea and 2.9 million kilograms of Low Grown (Leafy/Tippy) teas at the third auction in June.
At the previous auction on June 16 and 17 Sri Lanka sold 6.7 million kilograms of tea.
Sri Lanka recorded a combined tea sale average of 623.85 rupees/ 3.4 US dollars for three sales, Colombo-based Ceylon Tea Brokers, said in a report.
Sri Lanka vs Global markets
In comparison with key global markets like Kenya where volumes are huge, traders said that Sri Lanka tea prices were faring at better levels.
Kenyan tea prices have continued to fall for four weeks, traders said.
Sri Lankan CTC prices have come down with quite a bit of volume since Unilever, who has been operating on selected CTC marks, slowed down purchasing, traders said.
However, CTC prices in Sri Lanka still remain comparatively higher than Kenyan teas.
The overall picture of the High Growns shows both BOPs and BOPFs with good quality eased with average sorts along with cheapest teas on offer still selling well.
Traders said that there still is good demand; however it is at a price.
Sri Lanka’s High Growns sell at sharply lower prices than Low Growns.
China has continued to bring in strong demand for Sri Lankan tea and industry players expect that it would drive the demand further followed closely by Taiwan.
Turkey, which is a highly active market for Sri Lanka has been the reason for Pekoe teas holding strong.
Russia was also seen active whereas Europe and the continent have shown selective demand.
Tea brokers said that there were still a significant amount of unsold teas as the market which was contributing to falling prices.
The Department of Meteorology expects rain in both western and Nuwara Eliya regions in the week ahead.
Overall crop intake was moderate with Nuwara Eliya region maintained intake while regions like Western, Uva, Uda Pussellawa, Ruhuna and Sabaragamuwa showed a decrease.
In High grown teas select high priced Best westerns were irregularly easing while Below bests were firmer in BOP categories form an elevation average of 559.54 in total high grown teas last week.
There were next to none in Nuwara Eliya’s offered this week. Uda Pussellawa’s were firm and Uva’s select invoices substantially gained.
In BOPF grades Best Westerns and Below bests sold around last week’s price levels while plainer clean leaf sorts were firm and others were lower by 10 to 20 rupees.
Meanwhile BOPF grade Nuwara Eliya’s again saw hardly any offerings while Uda Pussellawa’s held firm and high priced teas of last week dropped sharply.
In Medium grown teas, BOPs were not steady while BOPF categories held firm in prices from an elevation average of 542.77 rupees in total medium grown teas last week.
Well-made OP/OPA’s eased by 10 to 20 rupees per kilogram. Other teas and tea in the lower end declined by 30 to 40 rupees a kilogram and more.
PEK’s in general were firm on last. Well made PEK1’s easier by 20-40 rupees a kilogram and more at times. Below best and poorer sorts were firm on last.
Select Best FBOPs were firm to easier, while others eased by 20-30 rupees a kilogram. Select Best FF1’s lower by 20-30 per kilogram, while others declined by 30-40 rupees and more at times
Low grown, select best BOP1 and a range of improved below bests were fully firm to dearer, from an elevation average of 542.77 rupees last week.
Meanwhile better OP1s declined. Other sorts and below bests declined by 20-30 rupees a kilogram towards the close of the auction while teas at the lower end maintained firm prices.
Higher priced OP’s fell while other sorts went from firm to making gains.
High priced OPA teas were irregular. Others were fully firm to dearer and the lower end prices did not change much from last levels but declined10-15 rupees towards the close.
Select best BOPs were firm and BOPF eased irregularly and at times lower.
Very tippy FBOPF/FBOPF1 teas attracted fair demand and were firm while Best and below bests were irregular. Cleaner teas at the bottom were firm.
Select best FF1’s were firm and made gains with Best appreciating. Cleaner teas at the bottom gained while others were marginally lower.
In CTC teas, high grown BP1s were firm while PF1s were lower by 20-30 rupees a kilogram.
Mid grown BP1prices went up and PF1s were irregular following quality
Low grown BP1s were reportedly firm. PF1s declined by 10-20 rupees.