Week 7, 2012

Tea market report 13 - 17 February, 2012

Another little rollercoaster this week. Mombasa moved up but not dramatically and only some grades / categories.  Blantyre saw maintained interest and again, a quite heavy out-listing of tea during the sale but a good uptake of tea after the event. Colombo was mostly up for LG tea but irregular for the HG offerings whilst Jakarta was erratically lower. The auctions in north India continued to see good interest for the better teas but less for the plainer types whilst the south Indian auctions showed an irregular tendency. In summary, another moderate selection of markets with the regular volatility which we expect these days. This erratic pattern will surely continue in the coming weeks and we expect the run of short price cycles to pertain. For every bullish factor, there is a countervailing bearish one and the markets are still running on sentiment, hence the weekly volatility. We have been beating the ‘no global shortage of tea’ drum and continue to do so. Yes, pockets of deficit in some tea growing regions but no fundamental shortfall.

North America has been busy and remains very much focussed on Argentine tea where crop shortfall is causing concern. UK / EU were steady overall whilst Pakistan packers continued to buy across the range in Mombasa but with less aggression. Afghanistan traders were slower in Mombasa whilst Karachi bazaar went along in the dust sector. We saw improved interest from Egypt with the horn of Africa a steady operator. Middle East traders were quite strong in Colombo with CIS active. The packers in north India bought steadily with the domestic buyers and bazaar dealers quite busy.

North India weather remains relatively dry with some rain in upper Assam and Darjeeling. Slight increase in temperature has been recorded. Dry weather prevailed over East of rift in Kenya, while West of rift tended dry and received some light showers only. Crop intake is low and estates reduced number of plucking rounds which is all in line with the seasonal pattern. Temperatures are high in Malawi and rain is expected due to a tropical depression which manifests as tropical cyclone Giovanni near Madagascar. Crop intake dropped further and remains below usual standards. Sri Lanka has seen showers and crop is about maintained. Good cropping conditions exist on both Java and Sumatra with intake tending steady. Vietnam is not producing tea, same in China. Argentine producers report hot conditions and crop remains 30-40% behind last year.

This made us smile:-

“Idiots law: Never argue with an idiot. They will drag you down to their level and then beat you through experience.”