Tea auction prices produce mixed brew

Thursday, 5 November 2015 01:16 - - {{hitsCtrl.values.hits}}

Tea prices at the Colombo auctions continued their downward trend in October as well in comparison to a year earlier but were better than September.

John Keells Plc said yesterday Sri Lankan tea sales average for the month of October 2015 at Rs. 390.13 per kilo yet showing a negative variance of Rs.57.78 per kilo when compared to the corresponding period of 2014.

However, it was an improvement of Rs.21.95 per kilo when compared with the performance of September 2015, John Keells added.

It said all three elevations recorded negative variances with the biggest drop being recorded in the low grown elevation. The to-date, January-October, tea sale average is recorded at Rs. 400.04 per kilo, a negative variance of Rs.65.84 when compared to the same period of 2014.

Meanwhile, at yesterday’s auction 1.14 Mkgs of Ex-estate teas on offer met with lower demand. The procuring drive seen in the preceding weeks was lacking in the sale room.

“The limited well-made, clean teas with some merit sought some attractive bids. The Western High Grown BOPs were irregular, whilst the BOPFs were easier. Nuwara Eliya BOP and BOPFs met with irregularly lower demand following quality. Uva teas were irregular following quality. CTC PF1s and BP1s were easier,” John Keells said.

It said an irregularly lower market could be expected to prevail at next week’s Ex-Estate sale comprising of 1.18MKgs as quality has declined compared to what we have seen in the recent auctions.

“The sharp drop in prices at the Mombasa auctions and selected demand from the Middle East too does not auger well for the Sri Lankan tea market,” it added.

There was good demand for the 3.1 Mkgs of Low Growns that were on offer. OP1s advanced Rs.5 to Rs.10. BOP1s were firm, whilst the OP/OPAs and Pekoe/Pekoe1s advanced Rs.10 to Rs.15. The better FBOPs declined slightly on last levels, however the below best and bottom of the market was quite strong and prices appreciated fairly sharply. FBOPF1s too met with good demand. Better Tippy varieties were slightly weaker to last, however the levels could still be quoted as fairly healthy.

“The Low Grown averages of Sale No. 42 showed an increase of almost Rs.20 from the previous week, which was encouraging for the producers. There was good demand from the Russian buyers, whilst Iran and other Middle Eastern markets were quite active,” John Keells said.