Tea crop down 16% in April

Sri Lanka’s tea production for the month of April decreased to 26.47Mn/Kg from 31.62 Mn/Kg a year earlier, which is a 16% decrease year-on-year, said tea brokers who also warned earnings would be less over the next two months due to adverse weather conditions and possible slowing of demand.  

Ceylon Tea Brokers Plc said cumulative tea crop for the first four months of 2016 was down by 14 million kilos to 96.84 Mn/Kg. Elevation wise analysis shows that for the month of April High Growns declined by 2.12. Mn/Kg Medium Growns shows a decrease of 1.33 Mn/Kg and Low Growns declined by 1.70 Mn/Kg respectively when compared to the same period last year. 

CTCs recorded 1.80 Mn/Kg for the month of April 2016 vis-à-vis 1.73 Mn/Kg for the same period last year (+0.74 Mn/Kg).

John Keells Holdings in its tea market report released on Thursday observed High Grown recorded a substantial decrease of 26%, the Medium Grown recorded a decrease of 23%, whilst the Low Grown recorded a decrease 10%. Sri Lanka’s tea production in the first four months of this year at 96.8Mkgs has recorded a decrease of 12.74% when compared with the same period of 2015. 

“The outlook for the next two months will be one of a less buoyant market and is expected to be sensitive to higher volumes on offer and may take a further drop.  Another factor that needs to be taken into consideration is the deteriorating quality of the produce due to the very bad weather conditions that was experienced during the preceding weeks. More rains are expected in the South West quarter as the monsoon sets in,” the report said.  

The unit value of Sri Lankan exports at Rs.605.24 to end April shows a marginal positive variance of Rs.2.41 per Kg compared to the corresponding period of last year. A feature of the unit value of the various categories of tea exported in 2016 indicate that instant tea has recorded the highest positive variance of Rs.202.68 followed by Tea in Bags at Rs. 120.71 per Kg. Interestingly, Tea in Bulk shows a negative variance of Rs.23.57 per Kg. when compared to last year, bearing in mind that this category of tea comprises of 41,956,527 Kgs or 43.4%, when compared to the total exported quantity of 96,629,837 Kgs. 

Ex-Estate offerings comprised of 1.2Mkgs at this week’s Auction met with significantly lower demand. Overall quality of teas from the Western Planting Districts showed a decline. The Nuwara Eliya together with Uva/Udapussellawa showed no substantial change. The BOP/BOPFs from the Western planting districts were easier. Poorer types were less sought after as the sale progressed. The High and Medium Grown PF1 commenced slightly lower, but declined further as the sale progressed. A few Low Grown PF1s sold well, whilst the others were firm. The BP1s were irregular.

The 3.1 Mkgs of Low Growns that were on offer at this week’s tea auction, met with fair demand, however at lower levels to the previous week.   BOP1/OP1s shed Rs.10 to Rs.20. OPA/OPs were lower by Rs.10 to Rs.15.  Pekoes too declined Rs.5 to Rs.10.  FBOPs eased Rs.20 and more. FBOPF1s maintained last levels. Better Tippy varieties maintained.    

“Russian, Iranian and Saudi Arabian buyers were active but selective in their purchases,” the report added.