Week 31, 2015
Tea market report 27–31 July, 2015
This week, again the fire on the world tea market came from Mombasa. Buyers continue to pay up for better teas. Especially the KTDA EoR PF1 & PD types enjoyed strong support. The end of the cool dry period isn’t near. With the current firm demand, an easing supply / demand situation isn’t showing at the horizon yet. Looking in the rear view mirror, June’s crop figures show a slightly better production compared to last year but the production deficit is still slightly below 50 mkgs. The export figures show a contrary development, 6mkgs below last year. Remarkably exports to 4 destinations out of the top 10 export destinations are down with more than 40%.
In Malawi there wasn’t an auction this week, due to a lack of availability, which is seasonally normal. Production figures for Malawi with 1.7 mkgs are quite low and below the 5 & 10 year averages. The current weather is dry, the weather reports for August don’t mention anything about rain.
Auction quantities in Jakarta remain low, same as the outlots of 16%. With the current dry weather and the new high import taxes, no bearish signals can be found at the moment.
In Colombo the market eased again, some grades slightly, some grades, like HG BOPF, substantially. Main reason for the easing market is the lack of demand. The latest developments in main export destination Turkey don’t make it easier to sell tea. Small light in the dark is Iran, the demand will not change overnight but on the longer term this will be an opportunity for Sri Lanka.
The crop situation in Vietnam has improved further, temperatures have come down and the north received a lot of rain, floodings have been reported. In the north the market situation will soon come back to normal, in the south green leaf prices are still higher than the past years.
In India the monsoon continues doing its job and the long expected increasing auction quantities seem to be there in week 34. Crop intake is increasing, the market in the north and the south is easing. This could be an interesting opportunity for buyers who are hit by the East African bull.
In Africa, a firm demand and a lack of supply won’t change market situation on the short term. In India and Vietnam the situation has eased and doesn’t look tight on the short term. The Indonesian auction is suffering under low auction quantities. In Colombo it is the other way around, there is tea but a lack of demand. No changes are expected on the short term.
“Success is not the key to happiness. Happiness is the key to success. If you love what you are doing, you will be successful.” ― Albert Schweitzer
To read the full report, please download the PDF file: