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Weekly market report


Week 13, 2015


Tea market report 23–27 March, 2015


How could rain in a non-tea growing area influence sentiment in the tea market? There was heavy rain in Mombasa with some flooding. After a dry period in the tea growing area resulting in a bull market, we see a change of sentiment now the first rain has arrived in the tea growing areas. Last auction was mixed with steady to easier BP1s and PF1s but firm to dearer PDs. The weather reports for the Kenya tea growing areas look promising although upcoming auction quantities are still declining. If the weather omens are correct, an improvement in forthcoming auction quantities is expected soon.

 

In Malawi the auction quantities are running behind quantities of last year. Tea plucking and processing are in full swing but it seems the weather starts to become dryer and the end of the season is not far away. Big question will be if prices in Malawi will start an upwards movement due to the changing weather or if they follow the easing trend of ‘big brother’ Mombasa in order to remain competitive.

 

First new season teas have been auctioned in north India and have arrived in the fancy tea consuming countries. Due to relative dryness it isn’t clear yet how the crop is going to develop. It is clear that the crop in Sri Lanka in February has compensated the smaller January crop and is running ahead of last year’s crop. In combination with the lack of funds of the auction buyers, these aren’t ingredients for exciting markets. Improvements of the situation in the Middle East and Ukraine are not at the horizon and thus an improvement of the market in Colombo is not expected in the short term.

 

For the moment there is enough tea and more is to come. Demand is currently not surprising us, partially due to political situations in some areas of the tea drinking world. In the short term we won’t expect any excitement on the global tea market.

 

Climate is what we expect, weather is what we get. -  Mark Twain

 

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Weekly auction prices

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Quarterly tea production

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