Good demand for Ceylon tea at auction

At the last week’s Colombo tea auction, overall quantity recorded a marginal increase and totalled a 7.1 million kgs.

According to Ceylon Tea brokers, there was good demand all round with most teas recording a firm to dearer trend which could be attributed to the absence of an auction last week and the rupee devaluation.

Ex estate teas consisted 1.1 million kgs this week, overall quality of the teas were similar to the last week’s sale. BOPS in general showed weak demand except for Nuwara Eliyas which gained Rs.5 – 10 per kg. BOPFS witnessed a strong demand with below best and plainer westerns, Nuwara Eliyas and the Uva/udapussellawas gaining Rs.5 – 10 per kg on average.

In the CTC category BP1S sold irregular this week whilst PF1S showed a decline in all elevations. This week Low Growns comprised approximately 3.2 million kgs in the Leafy & Tippy catalogues.

There was exceptionally strong demand on the Low Growns across the board with most of the grades recording substantial gains from last sale. Best BOP1S/OP1S gained Rs.10 – 15 per kg. Select best OP/ OPAS appreciated substantially. Best and below best PEK/PEK1S gained Rs.10 – 15 per kg.

In the small leaf catalogues select best FBOP/FBOP1S gained Rs.20 per kg and more. Below best appreciated Rs.20 - 25 per kg. Wellmade Tippy teas attracted good demand. Below best gained Rs.25 – 30 per kg and more. Select best FF1S sold dearer Rs.10 – 20 per kg. There was good demand coming from CIS, Libya and Syria.

There was rain reported in Galle, Neluwa, Deniyaya and Ratnapura areas in the past few days and there is an increase of crop intake by around 30% to the factories. High Grown areas reported scattered showers.

This week especially the Low Growns appreciated substantially due to shippers to Iran and Libya buying aggressively. Easing of the remittance problem from Iran, higher number of LCS being opened and substantial enquiries from there helped the market to move up substantially especially the Small leaf.

If the current trend continues with strong Middle East buying and the depreciation of the rupee, which will augur well for the tea market for the second quarter of the year.