Rain dampens tea production: Lowest in a decade | Daily News


 

Weekly Tea Market Review

Rain dampens tea production: Lowest in a decade

The Sri Lanka Tea Board released preliminary data for the month of November 2019 confirming a figure of 23.96 Mnkg, was the lowest since 1998 crop of 21.09 Mnkg. Low Grown November crop of 13.29 Mnkg was at a 11- year low largely due to excessive rain.

However the High Growns 6.5 Mnkg was the highest since 2014 up 32% on last year and is well above the October figure of 3.4 Mnkg. Mid Growns 4.1 Mnkg is similarly highest since 2014.

The January – November 2019 cumulative quantity of 278.17 Mnkg is marginally higher on last year. The High Grown quantity of 58.7 Mnkg is marginally lower on the 59.7 Mnkg of last year, whilst Mid Growns at 43.3 Mnkg is marginally higher than last year. Low Grown cumulative of 175.1 marginally higher than YoY quantity of 174.67 Mnkg but is substantially lower than 181.6 Mnkg recorded in January – November 2017.

Total production for the period January - December 2019 should be around 302 Mnkg.

Meanwhile, Asia Siyaka Commodity Brokers PLC Vice President Sohan Samaranayake, commenting on the last Auction for 2019 on December 31, told Daily News Finance yesterday that Low Growns met with fair demand. BOP1 / OP1s sold at dearer rates, whilst OP / OPAs appreciated in value too. Pekoe / Pekoe1’s were held firm on last levels.

“In the Tippy Small leaf catalogues FBOP1 held firm, whilst FBOP / FBOPF1s sold at dearer rates. Select best and best FBOPFs gained in value, teas at the bottom were irregularly lower. BOPs appreciated in value. BOPFs held firm. In the Premium Flowery catalogues FBOPFSP / FBOPFEXSP appreciated in value,” he said.

A restricted volume of 0.6 Mnkg of Ex-Estate teas met with fair demand this week.

The best Western BOPs were about firm, whilst the BOPFs were lower Rs. 10 to Rs. 20; below best were irregularly lower upto Rs. 30; bottom was about firm. Except for a few Select Nuwara Eliya BOP, others and BOPFs lost Rs. 20 to Rs. 30. Select Udapussellawa BOPs maintained, whilst the others and the BOPFs were lower Rs. 10 to Rs. 30. Uva’s were Rs. 20 to Rs. 30 lower all-round. A few Medium BOPs maintained, whilst others and the BOPFs were lower Rs. 10 to Rs. 30. CTC PF1s were about firm, whilst BP1s were lower Rs. 10 to Rs. 20.

Customs data analyzed by Siyaka Research confirms total exports at 21.9 Mnkg for the month of November 2019. Segment analysis shows monthly exports of Bulk Tea was similar to 2018 and Packeted Tea were about 7% higher YoY 2018, so with Instant Tea exports, a gain of 18%. Tea Bags and Green Tea exports were lower this month.

In Tea Bags to date, up to November, Sri Lanka has exported about 112.2 Mnkg which is marginally higher YoY but Packeted Tea and Tea Bags have gained about 7%, whilst Instant Tea segment has gained 23%.

Overall total exports for the period January – November have reached 268.9 Mnkg; up 5% against 257.01 Mnkg of 2018. Even though to date Rupee terms Rs. 221.4 bln worth of tea was exported as against Rs. 210.6 bln. In USD terms the yield is lower compared to 2018.

Considering the figures released so far this year we could expect annual exports for 2019 to be around 290 Mnkg.


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