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Weekly market report

Week 49, 2016

 

Tea market report 5 - 9 December 2016

 

A better than expected Kenya crop figure for the month of October was silently reported by the Kenya Tea Board last week. Resulting in a two tier market in Mombasa with most BP1s and PF1s trading steady to easier while PDs and D1s trading firm  to dearer. The 17% outlots is also an indicator that demand made a step back this week. Auction quantities continue to move North on the back of favourable weather conditions. All tea growing areas in East Africa experience regular rains with warm temperatures. Green leaf intake is in full swing and still improving. Despite favourable weather conditions and improving crop intake in Malawi, brokers haven’t been able to collect sufficient amounts of tea for organizing an auction. This is quite disappointing again and it is not expected an auction will be held before the end of the year.

 

It seems Indonesia has skipped the usual dry weather period, Sumatra and Java are still receiving daily rains. Auction quantities remain at a remarkably stable levels and higher than last year’s. Despite the continuous good offerings, demand is doing its job with only 7% outlots this week. The Colombo auction seems to have found their turning point, not only the offering for week 50 is higher than last year’s but also the mainstay of the market traded steady to easier. The weather has turned as well, the rains of the past weeks have turned into dry and windy weather conditions with crop intake declining. In Vietnam the season is nearing the end in the North and South, with one more plucking round in the Middle of Vietnam. A similar pattern is taking place in the North of India. The season has ended and pruning will start in the coming weeks. This week’s published crop figure for the month of October is lower than last year’s but January – October crop is still at a surplus compared to last year. The South of India has received very useful rains, hopefully this helps to boost crop and producers to fulfil existing contracts of which many of them are behind.

 

The supply side in Kenya is doing its job while Malawi is showing us a disappointing performance in the form of a lack of auctions. The North of India and Vietnam are about to end the season while all signs shows us that Indonesia is about to skip the dry period. On the demand side we see that buyers in Mombasa and Colombo are slowing down waiting for the market to land a price level which is more in line with the supply vs demand balance.

 

“It always seems impossible until it's done.” – Nelson Mandela

 

 

 

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Weekly auction prices

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Quarterly tea production

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