We reported last week that prices would continue their upward movement and the future looked bright, at least in the short run. But that was not to be at this weeks auction. Prices dipped marginally. Nothing to cause panic, but it did happen. There were a few platitudes loosely surmised but all opinion centred on rejuvenation of Kenya after the recent drought. Rains have returned to tea lands, although arid conditions continued in most areas in the bush. Tanks had dried. There was no rain approximately 3 years in those areas the report said.

Inter-monsoonal conventional showers usually experienced in most planting districts at this time of year have arrived. These districts have all reported evening thunder showers which augurs well for crop in April, the source said. But, again as expected quality dropped with hardly any seasonal characteristics. For that matter western quality was disappointing but thanks to the unprecedented drought in Kenya, and the CTC market starved of those teas, Ceylons picked up quite nicely.

How long these factors would last is free-fall guess the source said.

Approximately 5.3 million kilos were on offer at this weeks’ auction. Not phenomenal but although this bulk sold at depressed prices comparing last week, the market certainly was not bad.

Deputy Chairman Asia Siyaka Commodities (Pvt.) Ltd., Anil Cook drew attention to The Russian market granting Geographical Indicator status to Darjeeling tea.

Significance of this certification was completion of bilateral negotiations signed in India February 6 on Accession of Russia to the World Trade Organisation (WTO). Questions raised in tea circles now were ‘What was the Tea Board doing when all this was happening in the Tea Trading World, and would this be another nail in the tea coffin !! Would Ceylon tea face another global set back, was the question.

Geographical Indicator status extended to Darjeeling also included Basmati rice, and Alphonso mangoes as part of the protocol on completion of bilateral negotiations. This latter remark we agree has nothing to do with tea but quoted within this context to portray depth of agreements , expecting our quote for tea would be of significance to the tea Board.

Pakistan continues to buy tea. Sri Lanka has now dropped in order of preference to position 4. We reported about 4 months past that our supplies to that market was approximately 5 %, but according to Forbes and Walker tea report the supply percentage is now 4.21 %. Kenya continues to lead with 64.82 % followed by Bangladesh 5.74,Indonesia 5.27. Of importance was growing supply from Vietnam which now supplies 3.05 percent of Kenyan imports.

There was no apparent change to tea imports to the Australian market. India continued to lead exporting approximately 5,000 metric tons. Sri lanka continued to languish at position 2, primarily attributed to value added exports from Dilmah. Dilmah has already secured niche status in the Australian market through their branding strategies. Indonesia too exports to Australia. Australia imports approximately 22 % of its supplies from that source.

Be that as it may, Germany, USA, and also Canada have been recorded as tea exporters to Australia.

According to the WTO although saturation has not reached tea absorption supply is creeping to that level.

Irrespective of that looming negative prospect, iced tea and its many mixes in the beverage market is continuously picking up. Marketers are progressively innovating new off products to lure coffee drinkers to the tea habit, shipping sources said.

World production figures this year end January indicated minus variance in the production table. Sri Lanka dipped 1.3 % Kenya 16.18 %. However India has recorded gains and are now 1.9 % ahead for the same period last year.

Top prices this week from the Western high grown sector had Great Western and Matakelle from the Talawakelle hills get top billing. Laxapana too from the foot of the peak wilderness were among the preference sellers. From Nuwara Eliya, Lover’s Leap and Court Lodge led the price table for the elevation. CTC teas were also news makers. Mount Vernon, Florence, and Wanarajah, skirting the Hatton hills were good sellers this week. Kellebokka in the Madulkelle planes, and Rothschild in the Pussellawa valley had good prices added to their products.

There was good general demand in the Ex-Estate catalogues, but prices often declined sharply, following changes in quality. Select best Western BOP/BOPFs were firm on special inquiry, but last week’s peak levels were not attained. Others in this category and below best sorts declined Rs. 20 to Rs. 40. Nuwara Eliyas too were irregularly lower Rs. 5. an invoice of Court Lodge FBOP sold at a record price of Rs. 570 per Kg. select good leaf Uva/Udapussellawa BOPs were about firm, but below best types were irregularly lower Rs.5 to Rs. 10. Price drops were more noticeable for poorer leaf BOPs. High priced CTC PF1s declined Rs. 10 to Rs. 20. But below best types were fully firm.

The market for Low Grown varieties were irregularly easier. Select best PEKs sold around last levels, whilst secondary sorts were irregular. Teas at the bottom were about firm. Select best OP/OPAs were irregular whilst the secondary varieties eased Rs. 3 to Rs. 5. Teas at the bottom however gained Rs. 2 to Rs. 3. In the Small Leaf catalogues FBOPF/FBOPF1s continued weak with most teas being difficult of sale. FBOPs however sold around last.

- Market Report Courtesy Siyaka