Week 38, 2016
Tea market report 19-23 September, 2016
The announcement of the first sale below 100k packages since sale 20 and the smallest auction in 73 sales for week 40, lighted the fire on the Mombasa market this week. All grades traded firm to dearer with an absorption rate of 87%. The weather conditions remain unfavourable for the time of the year with reducing showers and cold weather EoR and scattered showers with sunny mornings and low temperatures WoR, albeit signs of some warming were also reported.
There wasn’t an auction in Malawi this week due to the off season but auctions will take place in the coming two weeks. This week’s published August crop report, showed us a double monthly production compared to August 2015. But as a percentage of the total annual production, the increase is very small. The weather conditions are normal for the time of the year with dry and hot weather conditions during the day and cool to warm circumstances during the night.
The Colombo auction continued its trend less strong compared to the past weeks. Many grades traded steady to easier but some were able to hold their last weeks’ levels, but none of them continued its last week’s strong upwards trend. Only the western region experienced occasional showers, the other tea growing areas reported bright and dry weather conditions. Demand remains firm and current weather conditions won’t help supporting the supply side. This week’s Jakarta auction showed us improved demand reflected in a lower percentage of outlots. Although weather conditions remain favourable with daily rains in most tea growing areas, auction quantities will decrease in the coming weeks. In North India CTC auctions traded steady to firm for the better teas, steady to easier for the less well made types and orthodox teas.
In Vietnam we’re heading towards the autumn and the end of the season but weather conditions in the south and middle of Vietnam continue to be favourable. Some producers expect to have an additional of 2 plucking rounds before the season ends.
Tea supply in Sri Lanka & Kenya is slow for the time of the year and continuous firm demand in all global tea trading centres make the general downwards potential of global tea prices limited. But as soon as the weather in Kenya warms up, an improvement of global tea supply could be expected.
“Markets are never wrong – opinions often are.” - Jesse Livermore
To read the full report, please download the PDF file: