Week 40, 2015
Tea market report 28 September–2 October, 2015
After two weeks of trading firm to dearer, the bulls in Mombasa have gone back into their stable. The Mombasa market opened steady but lost steam towards the end and closed easier. The crop figure of 28.4mkgs for the month of August is almost a record production for the month of August, only the crop figure of August 2012 was higher. The coming two auctions (101k pkgs & 107k pkgs) are relatively small. This may be a bullish signal, but we have seen small sales losing out in the past before.
The Limbe auction was very small, traded firm to dearer and only a small percentage of teas (11%) remained unsold. The weather is still very hot but some precipitation has been reported. The national metrological department has predicted more than average rains for 2015/2016 which gives hope as currently the circumstances are not too favourable.
Last week’s improved demand in Colombo on the back of a weakening currency has disappeared. With easing demand the auction traded steady to easier. Exporters are still facing payment issues and shipment delays. The political & economic situation in most Ceylon tea drinking countries hasn’t improved.
In Jakarta there was fair demand for the small quantity on offer. Java orthodox types traded steady to slightly easier for a second week in a row. The auction quantities remain very low, the quantities on offer for the coming auctions are >50% lower than last year’s. The growing conditions are improving slightly, with some isolated short showers at Java and decent precipitation at Sumatra.
In North India ctc teas traded steady to easier, orthodox teas trading firm to dearer. Except Darjeeling teas, which faced poor demand. Warm and sunny days have replaced the monsoon weather, green leaf intake remains stable.
Plucking is in full swing in the north of Vietnam, with rains during the night and cool sunny weather during the day. The plucking period in the middle of Vietnam has started late but will probably last longer than last year. Taiwan, a very important buyer of Vietnam tea, has introduced 3 more maximum residues levels for pesticides. Which will make it more difficult to export Vietnam tea to Taiwan.
No major changes in supply and demand this week. Rains are at the horizon of Malawi and a good Kenya crop could bring relieve to the supply side of African teas. Plucking in Vietnam is in full swing, cropping conditions in Indonesia are improving and the decent green leaf production in India remains stable. There is and will be enough tea available.
The connection between an entrepreneur in social media and the world of tea trading seems odd, but there is one:
“The biggest risk is not taking any risk… In a world that changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” — Mark Zuckerberg
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