Sep tea output falls 5% on bad weather

COLOMBO, (Reuters) - Sri Lanka’s tea production in September fell 5 percent from a year earlier due to heavy showers during the preceding month, the state-run tea board said on Wednesday.

Tea output in September was 25.05 million kg, compared with 26.35 million kg in the same month last year. Output in the first nine months jumped 18.4 percent to 247.28 million kg against 208.87 million in the same period last year.

“Heavy showers that prevailed during the month of August affected the plucking and application of fertiliser, which is the reason for lower crop intake in September,” H.D. Hemarathne, director general of the Sri Lanka Tea Board, told Reuters.

But Hemarathne forecast production of 310 million kg of tea in 2010 owing to overall good weather, better fertilizer application and good agricultural practices in the rest of the year.

The Tea Board hopes Sri Lanka’s No. 1 agricultural export crop will raise record high revenues of more than $1.3 billion this year, and possibly surpass the all-time output peak of 318.7 million kg in 2008.

Output fell 9 percent to 289.8 million kg last year due to adverse weather and a lack of fertiliser, along with one of Sri Lanka’s frequent labour strikes.

Sri Lanka’s annual earnings from tea exports fell 6.8 percent to $1.2 billion in 2009. Export revenue from January to July has risen 20.9 percent to $746.5 million compared to a year ago, the central bank’s latest data showed.

Tea is one of the $42 billion economy’s main foreign currency earners, along with remittances, garment exports and tourism.

Tea auctions this week

This week’s auction offerings totalled 6.8 m kgs. and were marginally higher than last week’s offerings. Ex estate offerings totaling 0.9 m kgs. met with good demand. BOPS met with good demand all round whereas below best western BOPS gained Rs.5 - 10 per kg. whilst the plainer sorts gained further appreciating Rs.20 per kg. on average.  Nuwara Eliyas too met with good demand gaining Rs.10 per kg. on average. The Uva/Udapussellawas gained substantially moving up to Rs.10 - 30 per kg. and at times more whilst Uvas gained to a lesser extent moving up Rs.10 – 15 per kg. However, BOPFS met with lesser demand whereas the better westerns declined Rs.10 – 20 per kg. whilst the below best varieties sold irregularly lower. Nuwara Eliyas lost substantially whilst Uva/Udapussellawas lost Rs.10- 15 per kg. on average.

In the CTC category High, Mid & Low grown BP1S sold irregular, whilst the corresponding High grown PF1S sold irregularly lower. Mid & Low Grown PF1S lost Rs.5 – 10 per kg. on average.

In the High & Medium leafy category the best PEK/PEK1S sold firm to dearer whilst FBOP/FBOPF1S maintained last week’s levels. The OPAS sold irregular.

Low Growns comprising approximately 3.6 m kgs. met with good demand and was dearer all round in comparison to last week. The select best BOP1S along with the select best OP1S gained Rs.10 – 20 per kg, below best too gained Rs.10 – 20 per kg. In the OP/OPAS category select best sold firm to dearer. Improved below best were dearer by Rs.5 – 10 per kg. Select best PEK/PEK1S along with others sold irregularly dearer. In the small leaf Tippy catalogues select best FBOPS gained Rs.10 per kg. Well made tippy teas in the below best category appreciated Rs.10 – 15 per kg however, others declined. Well made tippy teas attracted good demand and were dearer by Rs.10 - 20 per kg and more. Below best too appreciated in value. Best FF1S gained Rs.10 -15 per kg. Teas in the below best category too appreciated Rs.10 per kg and more. Teas at the bottom were irregular. (Ceylon Tea Brokers)