Week 17, 2016
Tea market report 25-29 April, 2016
Another large auction with >150k packages took place in Mombasa this week. This fairly large quantity met irregular demand. Some large buyers tried to cherry pick and refused to pay up while others like Iranian traders were willing to pay up for well-made teas. PD/D1 generally traded up to 15cts easier on the back of slowing demand from Egypt. With 6 auctions in a row of around 150k packages, the closing for sale 20 could be considered as a bull between the bears. Most Kenyan tea growing areas received good rains interrupted by some sunshine, crop is doing well but could do better. Some areas are difficult to reach and the wet conditions disturb plucking in some areas.
In Limbe the auction met reasonable demand with BP1’s and better PF1 seedlings trading firm. Other grades traded steady to easier. The end of the season is near, although the increasing temperatures stimulate the tea bushes to produce more green leaf. However, several tea estates are pruning, which limits the effect.
In the Colombo auction all grades traded firm to 15cts dearer with only a few exceptions. Many Ceylon tea consuming countries experience relative stability, partially because oil prices are moving in upwards direction. On the supply side, the weather conditions have become favourable again and the crop intake is increasing. This is not reflected in the auction quantities yet.
This week’s Jakarta auction showed irregular price movements but there wasn’t a lack of demand with only 3% out lots. Auction quantities remain at higher levels than last year and the weather conditions continue bringing favourable growing conditions.
In North India the growing conditions are favourable as well, may be with a bit too much rain. In this week’s auctions, most teas eased a few cents.
In Vietnam the first spring plucking is finished and the start of the season is very near with an increasing amount of rain in the north but the south of Vietnam is still dry. In Argentina the temperatures are falling which marks the end of the season. There is still some tea around but some producers counted a 20% lower tea output compared to the previous year.
On the supply side, Kenya continues to perform very well and with the current weather conditions more tea will be produced. With North India off with a flying start as well, means there will be plenty of tea in the coming period.
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