ECONOMYNEXT – Sri Lanka tea prices showed a marginal appreciation amid a dip in Indian production due to the Coronavirus pandemic, along with Chinese and some winter buying from Russia, brokers said.
Indian tea production is expected to come down by 20 percent as the country may be in lockdown for a while, traders said, which is what gave way to the high prices we experience at the moment.
Chinese buyers are fairly strong at the moment, which helps keeping the market buoyed, traders said.
Sri Lanka sold 5.3 million kilograms of tea, selling 0.6 million kilograms in Ex-Estate teas (teas sold while in the factory itself to retain quality) while selling 2.5 million kilograms in Low Grown (Leafy/Tippy) teas.
Sri Lanka sold 5.5 million kilograms of tea in the auction held in the previous week.
The seasonal winter buying which would have boosted the market during these days in a normal context is not that strong this year due to breaks in tradition and unprecedented pandemic situations affecting the whole world, throwing it off course.
Discussions are also underway for an oil for tea deal with Iran, traders said.
Traders said that volume-wise we are facing a rough 15 percent shortfall when compared with last year’s crop.
Meanwhile, with consistent showers resuming, brokers said they expected the crop to increase.
Sri Lanka, despite finding new Covid-19 cases on the daily run resulting from the newest cluster, attempts to mitigate the situation without resolving into a complete lockdown.
The tea prices which sky-rocketed in the early April-May period continued a steady decline owing to stagnation in foreign buying.
Tea sale averages
Sri Lanka Tea Sale Averages for the Month of September was 619.33 rupees (3.35 US dollars) as opposed to 511.31 rupees (2.83 US dollars) going up by 108.02 rupees in 2019, auction reports showed.
High Growns for the month of September recorded an average of 555.98 rupees, increasing by 97.43 rupees as against 458.55 rupees in 2019.
Medium Growns recorded a monthly average of 538 rupees, advancing 101.49 rupees from 436.55 a year earlier.
Low Growns recorded an average of 661.61 rupees, again climbing 117.68 rupees from 543.93 rupees last year.
Last week the Low Grown tea sale average was 666.00 rupees down by 12.32 rupees from a week earlier.
In BOPF category, a few select Best teas made gains as Best and cleaner teas at the bottom maintained last week’s prices while others were irregular.
Select Best BOP’ teas went up while Best and cleaner teas at the bottom made similar gains.
A selection of better OP’s were fully firm. Others particularly the Below Best types, though irregular were firm. At the lower end, prices eased.
Best OPAs together with Below Best were firm. Others were irregular. Select best FF1’s appreciated. Best and Below Best too gained. Cleaner teas at the bottom appreciated.
Last week, the High Grown auction average was tea sale average of 598.64 rupees.
In BOP category, select high priced Best Western teas were irregular, whilst the others eased 20-30 rupees a kilogram. Teas in the Below Best category were generally firm. At the lower end, teas gained 20-30 rupees a kilogram.
BOP Nuwara Eliyas saw hardly any offerings, brokers said.
Uda Pussellawas were 20-30 rupees up while select high priced Uva teas were eased substantially, and the others went down 10-20 rupees.
BOPF Best Westerns declined 30-50 rupees a kilogram. Teas in the Below Best category were firm and up to 20 rupees lower. At the lower end, clean leaf coloury teas, which commenced around last week’s levels, moved up 10-20 rupees by the close of the auction.
Nuwara Eliyas continued to sell well at attractive levels in comparison.
Uda Pussellawas – few select clean leaf teas were 10-20 rupees up, whilst the others declined by a similar margin and more following quality.
Uvas – majority of the teas were substantially lower mostly following quality, whilst at the lower end prices remained around last week’s levels.
Last week, the Medium Grown auction average was 554.65 rupees up 3.93 rupees from a week before.
Well-made OP/OPA’s were firm. Others together with teas at the lower end declined 10-20 rupees a kilogram.
BOPF’s commenced barely steady and appreciated by 20 rupees a kilogram by the close.
Select Best FBOP’s were firm on last whilst others in general were firm to gaining marginally.
Select best FF1s firm on last whilst others were firm to gaining marginally.
High grown BP1s/PF1s went up by 20 rupees a kilo.
Mid grown BP1s gained up to 20 rupees a kilogram. PF1s commenced firm and gained up to 20 rupees appreciating further as the sale progressed.
Low grown BP1s were generally firm. PF1s were firm and 10-20 rupees.
Crop and weather
The Department of Meteorology forecasts occasional showers in the Western Region and heavy rainfall in the Nuwara Eliya Region in the week ahead. Heavy rainfall is expected in the Low Groqn regions in the week ahead.
The Western and Nuwara Eliya regions reported Dull and rainy weather was reported from the Western and Nuwara Eliya regions, whilst a few sub-districts reported bright mornings.
Uva / Udapussellawa regions reported Bright weather throughout the week.
The Low Grown region reported bright mornings and overcast evenings with occasional showers during the week. (Colombo/Oct17/2020)