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Weekly market report

Week 5, 2016

 

Tea market report 1-5 February, 2016

 

Not much has changed from last week’s report. The Kenya closing was smaller than last week, but still the second largest in 58 weeks. As we wrote last week the teas were absorbed well, again this was the case with only 10% outlots. In general, the better teas came down and the plainer teas were priced around last week’s levels. The weather per region has been quite different, but generally the crop intake in East Africa is maintained at a high level for this time of the year. Only West Uganda has very dry weather and crop is on the decline. In Zimbabwe, serious emergency measures are taken due to the drought which threatens food supply. The planting districts in Malawi finally received good rains after the dry spell. Both Thyolo and Mulanje received 4 days or more of continuous rainfall and more is expected. This is a warm welcome after the, so far, wobbling season.

 

Less demand for the High Grown teas during Sri Lanka’s auction this week. Improved quality and a possible early Western season ending were not enough to convince buyers to pay more. The Low Grown market experienced a volatile trading day. After the sanctions against Iran have been lifted there are some challenges to get back on track. Good demand was shown at the Jakarta auction again, both orthodox and CTC selling at irregular rates. Also both Java and Sumatra experienced cloudy weather with useful showers, improving the crop intake.

 

With TET coming up the week in Vietnam has been quiet as factories are shutting down their operations. With low temperatures in the Northern and Middle regions and a dry and cool Southern area there is not much crop either. Unusual is the increased buying from Pakistan and Afghan buyers. Argentina received useful, intermittent rains, supporting normal harvesting cycles. The peso on the other hand is further devaluating, not recovering from the sharp decline in December so far.

 

The weather in North India is favourable for the tea, so an early start of the new season is coming closer. Until this starts we see the auction figures further declining, just like the prices. South India keeps meeting good demand and we see dearer rates.

 

Most of the regions showed good auction quantities or at least favourable weather in the week under review. In Africa the gap between is narrowing, but demand remains healthy. The demand on the Asian market disappoint neither, but is more volatile.

 

“Ideas are powerful because they allow us to see the world as it could be, rather than what it is.” Jason Silva

 

 

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