Tea auctions this week

Saturday, 20 August 2016 00:00 - - {{hitsCtrl.values.hits}}

By Forbes and Walker

Tea Brokers

A total of 5.7M/kgs came under the hammer this week. Low Grown varieties and similar large leaf teas continued to meet with good demand whilst the High and Medium Grown BOP/BOPFs witnessed an irregularly easier trend.

Low Growns comprised of 2.6M/kgs in the Leafy/Tippy catalogues. There was good demand. In the Leafy catalogue. OP1/BOP1s gained Rs. 5-10/- per kg and more particularly for the improved/clean below best sorts. Select best OP/OPAs were barely steady. Others were however fully firm. At the lower end too, the cleaner varieties maintained, balance eased marginally.

Select best PEKs together with PEK1s too were fully firm to dearer whilst the balance were irregular and lower. In the Tippy catalogue too FBOP/FBOPF1s were fully firm to dearer. Here again a selection of clean below best types gained on last. At the lower end too prices were fully firm.

In the Premium catalogue most teas were fully firm with a selected range of small leaf types gaining on last. There was good demand from Shippers to CIS Dubai, Turkey, Saudi Arabia and Kuwait together with Iraq.

Ex-Estate offerings totalled 0.9M/kgs. Overall quality of teas on offer from the Western and Nuwara Eliya planting districts were irregular whilst Udapussellawas were similar to last. Uvas – small selection of teas maintained fair seasonal quality whilst the others showed no significant change.

Best Western BOPs – a select range of teas gained Rs. 10 per kg following special inquiry whilst the others were lower by similar margin. Corresponding BOPFs declined Rs. 10-30 per kg and more for last week’s high priced teas.

Brighter BOPs in the below best category were firm whilst the others declined by Rs. 10 per kg. Corresponding BOPFs had a selection of teas which sold at firm rates following special inquiry whilst majority declined Rs. 10-20 per kg. Plainer BOP/BOPFs were mostly firm.

Udapussellawa BOP/BOPFs declined Rs. 20 per kg. Uva seasonal teas continued to sell well whilst other coloury sorts declined Rs. 10-20 per kg. CTC teas continued to witness a firm trend with the corresponding Low Grown varieties, realising fairly attractive prices.

There was fair demand from shippers to the CIS whilst most other markets were selective.

The Sri Lanka Tea Board in a recent newsletter highlighted the adverse impact on tea prices following the steep recession in Russia, weakened by the impact of economic sanctions and falling oil prices. Meanwhile China, the single largest market for tea in the world, has had more positive growth for tea in 2015. It further stated that India would be an exception with Euromonitor’s latest forecast anticipating a 4% CAGR in retail volume sales of tea in India from 2015-2020 and an 8% CAGR in value terms.

While an emerging consumer class is lifting packaged hot tea (along with other consumer goods), an affluent, urban middle class is creating a new tier of premium tea consumption. Food service concepts like Chaayos and Tea Trails are aggressively opening new outlets in high traffic areas and exploring higher value tea options than traditional chai.