Tea prices soar, low growns sell at around Rs. 700 per kilo

By Steve A. Morrell

Three Tea Brokering houses, Ceylon Tea Brokers, (CT) Forbes & Walker (FW) Tea Brokers and Asia Siyaka (AS) Commodities Plc, confirmed that prices realized up to end June 2017 have been the highest on record .

Last week, 7.1 million kilos came under the hammer. However end June, overall averages recorded were at Rs. 597 per kilo, indicating increases compared to 2016. 2016 end June results were Rs. 433, which indicated price achievements of over 100 percent.

It was also reported the ex estate catalog produced good results with Nuwara Eliya and other Western locations also in the record price category.

FW reported good demand from shippers to CIS countries, Turkey, Saudi Arabia, Kuwait, Turkey and Iraq. It was also reported there were notable tea factory owners who sold some of their produce to markets in the US and some European destinations.

Such teas were sold outside the auctions on initiatives explored by each such factory owner. Although, such quantities were not of substantial volume, pluses were that there were market openings that could be explored for substantial volumes that could be exported to these destinations. These were considered non-traditional retail markets, and that such initiatives should be encouraged.

However, sensational results by low growns made the difference to the overall average achieved. Low grown’s end June results were an average of Rs. 643. Comparable results for the same period 2016 were an average Rs. 459 – an increase of around 150 percent. CTC averages too contributed to overall results. The average for these teas were Rs. 503.

However, irrespective of such prices, the corporate sector continued to record losses, reasoned by high cost of production because of depleted crops. Could there be a silver lining in the short term? Answer to this question did not elicit any positive responses, but the general comment was ‘leave us to manage, and we’ll deliver. Don’t constantly look over our shoulders’.

As a result of strong market conditions, smallholders have made substantial profits. Most recent responses were that their personal debt situation eased and they have been able to pay back their loans. Banks operating in these areas have indicated most smallholders are now solvent.

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