Week 10, 2014
Tea market report 3–27 March, 2014
In Mombasa, price levels eased again on account of current high auction quantities. Malawi met less demand during the sale but a decent quantity was taken after the auction. Jakarta market eased with a fifth taken out and the main packer operating without too much force. Colombo continued to ease while in north India availability and quality is now dwindling and there will be an auction break. Demand in the south stays firm with irregular price levels. There is talk of a 40% green leaf price increase to keep pace with the recent devaluation and inflation in Argentina. Vietnam & China are getting closer to spring plucking while current stock is limited or just enough for outstanding contracts.
The central Kenyan highlands experienced sunny, dry and warm weather while crop intake continued to increase. The western highlands received the same weather but crop declined further with some tea bushes showing signs of moisture stress. Malawi dried up towards the end of the week and remained hot and sunny. This should give a further boost to the crop intake. In Sri Lanka, the January crop figure showed a healthy 25m.kgs plus figure while current crop is reportedly down with occasional showers in most regions. Crop in Indonesia is good but the quality is irregular due to rain with a lack of sunshine. North India is close to the first flush with day temperatures on the rise.
In terms of outlook, we cannot see too much downside out there and feel that we are close to the bottom. But, with the long rains in Kenya around the corner, the upside is limited as well and the market will probably wobble in the weeks coming. The far East is getting ready for their growing seasons, supply will increase and we wonder if demand can keep up.
Talking your way out of something;
“I consider conversations with people to be mind exercises, but I don't want to pull a muscle, so I stretch a lot. That's why I'm constantly either rolling my eyes or yawning.”