Week 26, 2016
Tea market report 27 June - 1 July, 2016
Isaac Newton once said: “What goes up, must come down”. The previous quote wasn’t only applicable for physics but also for the Mombasa market. Slowing demand from Afghanistan and Pakistan made the PF1s, PDs and D1s ease. BP1s continued their upwards trend on the back of demand from Iran, Sudan and Kazakhstan but did slow towards the end. The weather conditions are seasonally normal. It is cold but still raining. Besides the weather, also strikes by pluckers at certain WoR estates contribute to the lower intake. April’s crop figure shows a healthy supply which is very much in line with 2014 & 2013.
Another firm trading session took place in Limbe, demand readily absorbed the teas on offer with only 11% outlots. The weather is relatively favourable for the time of the year. With warm weather during the day but cold to very cold during the night. Most tea factories are closed for maintenance.
Indonesia is approaching the end of Ramadan, which slows business down. This was also reflected in the outlots of 13%. Java is still experiencing daily heavy showers but rainfall in Sumatra is reducing considerably.
Despite the lower quality invoices on offer, the Colombo auction continued the upwards trend. Declining supply and steady demand makes the downwards potential very limited short-term.
In Vietnam the weather conditions hot and dry in the North & Middle areas, but the south is receiving favourable weather conditions with daily rains. Crop output in the North & Middle areas is declining as a result.
The north of India was mostly dry for a change but hot. Crop output in the past month have been excellent according local sources. This is also reflected in the auction quantities which are considerably higher than last year’s. After a few months of a general firm trend, this week’s South Indian market traded steady to easier.
With supply and demand making a small step back in Mombasa and Jakarta, the North Indian auction centres show a contrary movement. In the coming week Eid al-Fitr will be celebrated in Muslim countries and buyers are expected to take a break as well. But there will be enough tea to fill up the supply chain again after the celebrations.
“What goes up, must come down.” – Isaac Newton
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