Week 21, 2015
Tea market report 18-22 May, 2015
In Mombasa the auction quantities have started to increase again on the back of the rains which arrived weeks ago and finally start to sort their effect on the auction quantities. But auction quantities are still running far behind last years. This week’s good demand and low offerings was inspiring the market to move up. In the coming weeks we expect downward potential but because production is running behind last year’s production figures and demand is decent, the downwards potential will be very limited.
This week’s Malawi crop figure has been published after the auction. The production in the month of April was not following the trend of the previous months which indicated lower figures than last year. April 2015 production was in line with April 2014’s. Supply is currently in line with last year, demand is decent as well. Last auction only had 16% outlots which is relatively low. Probably buyers are covering their needs before the tea season ends.
The Colombo auction was livelier than the past weeks. This was mainly caused by improved demand, situations in destination countries start to improve and stock levels are relatively low. An improving Turkish lira helped to stimulate demand.
The Jakarta auction showed less demand which caused many withdrawals. Not only demand is low but also auction quantities are very low, up to 30% below last years. The general impression is that many producers have an increasing amount of private contracts. The weather at Java start to become dry again, only at Sumatra there is an occasional shower. With the less favourable weather, crop intake is decreasing considerably.
More reports about a bumper crop in India are coming out. Local traders report that April’s crop will be 30% higher than last year. Still pre-monsoon showers should provide close to ideal growing conditions for tea.
“Do not be embarrassed by your failures, learn from them and start again.” - Richard Branson
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