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Weekly market report

Week 8, 2017


Tea market report 20–24 February 2017


The announcement of the smallest auction of the year in week 10 wasn’t much reason for the Mombasa auction to catch fire. Most grades traded steady to easier, only medium and plainer BP1s met very good support from Sudan and Kazak buyers. Buyers are used to the seasonal weather circumstances and don’t panic as earlier this year. The weather is seasonally dry, only EoR received some scattered showers. Crop is reducing in all tea growing areas in Kenya, Uganda, Rwanda & Burundi. Although weather circumstances in Malawi are still very favourable, the crop intake is declining. The second flush is almost finished, the tea bushes are preparing for a next flush. Despite the favourable weather circumstances and decent production, auction quantities continue to run behind last year’s. The limited quantities on offer in the Limbe auction traded fully firm to dearer. This could be caused by buyers who are looking for an alternative for Kenya & Uganda plantation teas.

In Colombo, the only sign of weakness was shown by HG dust, all other grades traded firm to dearer. The Turkish Lira continues to strengthen, followed by the Russian rubble. Both improve the buying power of the tea packers, this combined with the recent dry weather circumstances at Sri Lanka, were not a recipe for a soft trading session. Fortunately, some rains have been reported, which should bring some relieve to the tea bushes. The referendum to amend the constitution in Turkey in April could bring some volatility to the Lira while the Russian rubble is very vulnerable for a softening crude oil price. This week’s Jakarta auction met good demand with only 5% of the teas on offer remaining unsold. On the back of firm demand, the auction generally traded firm to dearer. The rains at Java & Sumatra continue to do their job, may be a bit too good. Several floods have been reported at Java, which is causing logistical problems. In China & Vietnam, we’re slowly heading toward start of the tea season which consists of spring plucking for the premium tea. The North of India is still in the off season but widespread showers in Assam may lead to an early start of the season. Darjeeling is suffering under dry to very dry circumstances, these aren’t favourable for a healthy first flush. The South of India is experiencing a similar situation, the tea estates are dry with a very low crop situation.


Global demand is performing very well while supply is trying hard to keep up. Tea production in many countries is seasonally low. In the meantime, political stability in many large tea consuming countries are giving possibilities to trade tea.


“It makes more sense to buy a wonderful business at a fair price than it does to buy a fair business at a wonderful price.” – Warren Buffet



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