We spoke to President / CEO Asia Siyaka, Anil Cooke . Then to Chairman Planters’ Association of Ceylon, (PA) Dhamitha (GDV) Perera.
There were mysterious phenomena surrounding the industry. Prices were good, but Plantations consistently reported losses. Seemed incredible but end results as known to us pointed to various reasons which did not quite add up.
GDV Perera said there was nothing quite so mysterious because the bottom line was that Q4 last year the industry faced serious regression governed by the international cash crunch. Consequently the banks stopped lending, and he said’ If you remember when we discussed this at that time I said we were also hard pressed to pay worker wages. That combined with the drought Q1 this year saw the industry in reverse mode. Prices were good, yes, but that is not the whole story.
Anil Cooke had more or less something similar to say. Anil Cooke, a past Chairman Colombo Brokers’ Association did not have dissension views to the Chairman PA .What he said was that the market was good mainly based on global shortfall in crop. A simple question of supply and demand. Globally, crop shortage of some 100 million kilos could not be brushed aside as insignificant. Sri Lanka’s contribution to this short fall at about 40 million kilos had its telling effect on cost of production. Additionally the collective agreement and on-going discussions were also disarming factors which could not be ignored. ‘Could there be reversal of this baleful situation?’ Both Cooke and Perera were confident there could be better times in the short term.
Ceylon Tea Brokers reported ‘the market was settling on firm ground’. But characteristically said Western high grown BOPF prices ‘came down with a thud’ They gained Rs70. to Rs.80. previously but last week lost as much. Per kilo.’Not very pleasant’ said a proprietary planting source in Maskeliya. ‘We are not in the big player league and when things like this happen, we really are in the dumps.’
We also sought clarification on the merits or demerits of various teas being sold. Black, tea, green tea, herbal tea what was the difference? Cooke said herbal tea is really not tea, but a collection of herbs, or roots boiled, and served as you like it, but at upper level prices. Not tea at all.
But green tea and black tea are varieties of tea and are all good, and unavoidable health drinks. He said tea is tea. Drink it.
Market indicators are that UVA teas have scored substantive gains. It is not that the Uva season is upon us, but again market dictates were that anticipation of a good Uva season could not be ruled out. Such speculation did have some influence on prices they said.
Uva Highlands in the upper reaches of Hali Ela on the connecting road way in the Malwatta Valley connecting Attampetiya and Bandarwela sold a BOP at Rs 650. which was outstanding for this time of year. Similarly Ampitiakanda, and Craig in the Bandarawela belt sold well. Luckyland in Udapussellawa, again emerged a good seller after quite a spell.
This week 5.5 million kilos will be on auction. Drop of about 500,000 kilos.
All told good price trend is expected to continue, particularly because of winter buying after the Uva season which will have influence on prices.