Troubled tea gets peaceful start in first 2016 auction

Thursday, 7 January 2016 00:00 - - {{hitsCtrl.values.hits}}

The troubled tea industry started out the new year on a peaceful note with the first auction for 2016 seeing “good general demand,” according to John Keells brokers.

The first auction for the year comprising 6.1 Mkgs met with good general demand, the company said in a statement yesterday, with ex-estate offerings comprised 0.99 Mkgs meeting with enhanced demand for well-made teas.

“Best Western High Grown BOPs were dearer following quality, whilst the BOPFs too showed a similar trend. Nuwara Eliya BOPs were barely steady with the BOPFs being irregularly easier with some invoices remaining unsold.

Uda Pussellawa BOPS were easier whilst the BOPFs were easier following quality. Uva BOPs were easier whilst the BOPFs were dearer when compared to last week. Low Grown CTC BP1s and PF1s were dearer. High and Medium types too followed a similar trend,” the statement added.

John Keells was hopeful that 2016 would be an important year to enhance quality, productivity and sustainability of the plantation industry.

“Sri Lanka has had a rough time with tea prices falling well below production costs and seemingly out of sync with her past performances. The key markets such as Russia, Turkey, Iran, Egypt and Syria are yet in turmoil and going through a bad patch both politically and economically. There seems to be little or no respite in these markets, suggesting that it would be prudent to look to new markets and destination for Sri Lanka’s exclusive range of orthodox teas,” it noted.

Even though crop figures indicate a good year for tea production in 2015, the lack of predictability of monthly distribution had a somewhat oscillating price structure during the year. This unpredictability will be a key determinant throughout 2016 as the western quality season sets in during the first quarter, the company observed.