The strong market in Colombo for Small leaf High Grow teas has been driven by global and local factors. Most major producer exporting countries have recorded a decline in production over the past few months particular Kenya, India and Sri Lanka; the total drop is in excess of 50 Mn kg. In Sri Lanka auction volumes of High Growns have declined sharply as a result of the quality season and the irregular weather on the Western side of the island. Ex-estate quantities over the past four sales have been around 500,000 kg and show no sign of sharp increase, in the immediate future; thus maintaining supply pressure on the market.

Better speciality tippy teas, which were sold at long prices at the last sale, lost sharply in value this week. All small leaf varieties declined Rs. 5 to Rs. 8 and at times more for the below best types. OP/OPAs at the bottom end of the market recorded sharp price increases this week. Overall the market for Low Growns did not change significantly when compared with the previous week. At the August 28 sale Low Growns were sold at an average price of Rs. 166.22. It has been ten long weeks since Low Growns reached this average price level and often the price per kg was Rs. 10 to Rs. 15 lower. The turn around is loosing momentum however as the last two auction averages for Low Growns was Rs. 163.23 and 162.68 respectively. A temporary slackening of demand for some key Middle Eastern markets has not been compensated for, by on going activity for Russia/CIS. Further a comparatively high percentage of poorly made low priced teas carried over from previous months tend to pull down the average. This weeks drop in prices for Low Grown off Grades could well pull the figure closer to 160.

In the Ex-estate catalogues the strong market for Western BOPF continued and many teas gained a further Rs. 5 per kg. Buyers are struggling to adjust price levels that have risen sharply over the last three sales; and this week BOPs too gained in value. The price differential between the grades though narrowing continue significantly in favour of the BOPF grade. Interest for seasonal Uva was maintained. The Nuwara Eliya though, recorded wide fluctuation of fortunes between the BOP and BOPF grades consistent with the general trend in the market BOPF continued strong and were well sought after. The BOPs however were selling at significantly lower levels reflecting a general drop in the intrinsic value of the end season teas.

In the Off Grade catalogues better liquoring Western Fanning grades moved up sharply, whilst in the Dust catalogues the corresponding primary Dust also gained sharply in value. As a result of these positive changes at the top and bottom end of the market we expect the average price per kg for High Grown sold at this week’ s sale to move upto the Rs. 150 per kg level. (Asia Siyaka)