[ TEA REPORT]
John Keells Tea Market Report:
August tea production records increase
Sri Lanka's tea production in August has once again recorded an
increase of 1.2 Mkgs (5 percent increase over the corresponding month of
2009). The production to end August has now risen to 221.2 Mkgs which is
39.3 Mkgs over and above the same period last year. If this trend were
to continue in the balance months of the year, we could see an all time
output surpassing the 318.7 Mkgs recorded in 2008. Interestingly to end
August the difference is just a mere 1.7 Mkgs.
The expected increase in production could also see Sri Lanka's annual
earnings from tea exports peaking at US $ 1.3 billion, which will be an
all time record, according to Sri Lanka Tea Board sources.
Favourable weather conditions in most black tea producing countries
in 2010 has helped to boost global tea supplies by 13 percent with the
bulk of the increase of 76.62 Mkgs coming from Kenya, where production
in the first seven months has peaked to 237.41 Mkgs. Kenya too is on
course to record an all time high which will exceed 369.6 Mkgs recorded
in 2007 by some distance. Already Kenya is ahead by 15.9 Mkgs compared
Last week we witnessed liquoring BOPF advancing to unexpected levels,
given the world supply situation in the current year and the price
levels at other auction centres.
The expectation that this was possibly on account of the need to
complete urgent orders in the Tea bag sector was confirmed, as the
demand at this weeks auction was much weaker, and the overheated market
took a significant correction.
The BOPs on the other hand received more widespread demand, and
enjoyed price increases ranging from Rs 5 to Rs 20, specially due to
limited availability. The gap in prices between the two grades widened
sharply last week in favour of BOPF, which held an advantage of Rs 100
and sometimes much more. With the prices moving in the opposite
direction this week, the gap narrowed considerably. It is possible that
the BOPF could weaken a little more at the next auction, but the BOP
market looks bullish.
Nuwara Eliya BOPFs declined Rs 40 and more with a number of invoices
remaining unsold and the few BOPs on offer mostly maintaining. Uva's
fluctuated in price following quality with price declines on average of
Rs 40 to Rs 50 while a few colory teas declined only marginally. CTC's
in general eased Rs 20 to Rs 30 with a large weight of Low Grown types
remaining unsold for want of bids.
The 3.3 Mkg of Low Growns that were on offer this week met with good
demand. In the Leaf category, BOP/OP1s continued the bullish trend with
prices maintaining for the best on offer, whilst the below best
appreciated a few rupees. Pekoes too maintained last week's levels.
The select best OPAs were mainly firm, however a few below best
varieties advanced in value. In the small leaf category there was
slightly less demand to previous weeks, with prices declining several
rupees, although the levels are still quite satisfactory.
Production in the Low Grown planting districts have shown a decline,
hence the lower offerings in the coming weeks.
There was excellent demand from Iran, Russia and Iraq, whilst Dubai,
Jordon, Libya, Saudi Arabia and other Middle Eastern countries also lent
Select Best BOPs were firm to dearer, other Good invoices gained Rs
10, Below Best sorts advanced Rs 10 to Rs 15 on average, plainer
varieties were Rs 10 dearer. Select Best Western BOPFs declined Rs 20 to
Rs 30 as the sale progressed, other good invoices along with the Below
Best and plainer varieties declined Rs 40 to Rs 50 and more as the sale
progressed. Select Best Medium BOPs declined Rs 20 to Rs 30, others
gained Rs 10 to Rs 15 on average. BOPFs shed Rs 15 to Rs 20 and more at
Nuwara Eliya teas
Brighter BOPs were firm, others gained Rs 10 to Rs 15. BOPFs declined
Rs 20 to Rs 30 on average.
Bright Uva BOP/BOPFs declined substantially following quality, other
BOPs gained Rs 15 to Rs 20 whilst the BOPFs shed Rs 10 to Rs 20 on
average. Udapussellawa BOP/BOPFs declined Rs 10 to Rs 15 and more,
whilst the BOPFs shed Rs 30 to Rs 40 on average with a fair volume
A few Select Best Low Grown PF1s were firm following special inquiry,
others declined Rs 20 to Rs 30 and more as the sale progressed with a
fair volume remaining unsold. BP1s were firm to Rs 10 dearer. High and
Medium PF1s shed Rs 20 to Rs 30 on average. BP1s declined Rs 10.
Fair demand. Select Best OP1s were irregularly dearer by Rs 3 to Rs
5, Best along with the Below Best varieties were firm Rs 5 to Rs 10
dearer, poor types too gained by a similar margin. Select Best BOP1s
eased Rs 10 to Rs 20, however the balance were irregularly dearer by Rs
5 to Rs 10. Select Best OPs appreciated Rs 10 to Rs 20 and more at
times, Best types too were irregularly dearer by Rs 5 to Rs 10, Below
Best and poor types were firm on last levels. Select Best OPAs shed Rs 5
to Rs 10, Best and Below Best types too were lower by a similar margin,
poor stalky varieties declined sharply by Rs 10 to Rs 15.
Select Best Pekoe/Peko1s shed Rs 10 to Rs 15 and more following
quality. Bold Pekoe varieties maintained last levels, poor flaky types
tended low by Rs 3 to Rs 5. There was fair demand for the Tippy and Semi
leafy Grades, however prices were lower to last. Select Best and Best
BOP/BOP.SPs shed Rs 10 to Rs 15, Below Best types were firm, poorer
sorts were lower by Rs 10.
Select Best and Best FBOP/FF1s were initially lower by Rs 10 to Rs 15
but declined further by Rs 20 to Rs 30 and at times more as the sale
progressed, Below Best and poor sorts too followed by a similar trend. A
few Select Best tippy invoices maintained last levels, however the
balance and the best types declined in value, Below Best and poorer
sorts too were lower to last.
Select Best liquoring Fngs1s depreciated Rs 10 to Rs 20, whilst the
Best and the Below Best were lower by Rs 10 to Rs 15, poorer sorts
appreciated Rs 10 and more at times. All BPs were lower by Rs 10 to Rs
15. Select Best BMs depreciated Rs 10 to Rs 15, whilst the Best and the
Below Best types were lower by Rs 10, poorer sorts depreciated Rs 10.
All Low Grown Fngs appreciated Rs 10. Select Best BOP1As were firm on
last levels, while the Best and Below Best shed Rs 10 to Rs 15 and more
at times, poorer sorts too were lower by Rs 15 and more with very low
Good demand. Select Best Dust1s gained Rs 10 to Rs 15, others in the
Best and Below Best category advanced Rs 10 to Rs 20, while the poorer
sorts were firm .
All secondary Dusts were firm. Best Low Grown Dust/Dust1s were firm,
while the balance were irregularly lower.
Rohantha to address Global Tea Convention
The Middle Eastern Coffee and Tea Convention which attracts the cream
of business delegates from 51 countries around the world has invited top
business professional and economic strategist Rohantha Athukorala to
address the conference Current Trends and Future of the Industry with a
Case Study of Privatization Effectiveness to be held in Meydan Hotel,
Nad Al Sheba Dubai, UAE from October 12 to 14.
This year's event is organized in partnership with the Speciality
Coffee Association of America (SCAA) and will feature some of the
trendsetters for business and economic strategy globally.
The personalities lined up to address are Brewed Behaviour USA CEO
Tracy Allen who will speak on 'Driving Unique Value Propositions in the
Tea and Coffee industry.'
The renowned speciality coffee expert Shawn Hamilton will share
'Craft Roasting Comparative Cupping', the Rwandan Tea Authority Director
General Anthony Butera will give the finer tips of the Rwandan
experience on tea tasting. Kempinsi Hotels Middle East and Africa
Regional Director Koren Thurnbern will highlight building a business and
holding on to people while the Tea Board of India in UAE Director
Promotions Manish Sharma will highlight Indian tea and what sets it