Week 30, 2014
Tea market report 21-25 July, 2014
The summer conditions in the north nor festive days in the Middle East have had much impact on the tea market and most centres were quite active. Mombasa gained yet again on the back of reduced offerings and improved quality. Sri Lanka was a bit mixed but continues quite strong overall. Malawi and Indonesia gained both though not much tea is on offer in either centre. Only India is lagging behind a bit with North India drifting and South India mostly easier with limited export inquiry for both.
The weather patterns are seasonally normal in most origins. India and Sri Lanka are enjoying full monsoon conditions, whilst Indonesia is dry. Winter conditions in Africa make for cool and mostly dry weather, though water tables are fine and lack of moisture isn’t an issue. Kenyan forecasts talk of thunderstorms in the west which may cause some wet conditions in the plantings districts, but this is too early to coincide with the short rains which aren’t expected till September. In Argentina a similar situation exists with cold but wet conditions which helps to keep the bushes in good shape. In short, cropping is normal to good and the way things look now & further out, there is no shortage expected anywhere.
Despite Kenya’s performance in the last 3 weeks we are only mildly bullish. We wonder if Mombasa can maintain its current trend and believe it may start to stutter/show some volatility, provided auction quantities don’t drop dramatically. However, we think this is unlikely and expect offerings to be relatively stable in the next 6 to 8 weeks. On the other hand, there seems to be little downside as demand is out there and some good quality teas are available.
We like this:
“Fast, cheap and good. Pick two. If it’s fast and cheap, it won’t be good. If it’s cheap and good, it won’t be fast and if it’s fast and good, it won’t be cheap….”.