Colombo Tea Auction buoyant with Middle East strong demand
TEA MARKET: The Colombo Tea Auction witnessed a quantity of
5.3Mkg being sold this week, of which 1.1Mkg were Ex-estate teas. On the
whole the market was buoyant due to the loss of the last sale as well as
some confusion with regard to the sale scheduled for April 30.
Tippy Teas were up this week due to strong demand from Iran and Dubai
as well as continued interest from the CIS. Iran in particular was
active on Tippy varieties as a result of the shortage of very good
quality teas in the market. Additionally, the buyers were aware of a
‘rush crop’ that will flood the market in the coming weeks and widen the
price parity between the different grades of quality.
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TEA: A cup that has become a revolutionary component in the
economy.
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Demand for Pekoes’ shot up this week due to strong interest in the
small-made ‘shotty’ varieties. Saudi Arabia was at the frontline of the
buying thereby pushing up the ‘wiry-leaf’ teas like OP1s and BOP1s.
However, the ‘flaky leaf’ teas were a little shaky, indicating
perhaps that the demand for this type might fade in future sales.
Week-on-week, the currency changed a tad, moving from Rs. 109.35
(buying) to Rs. 109.70 against the US dollar.
However, the dollar was up against the ropes with the European
currencies as the UK Pound once again breaching the two dollar mark.
According to the Central Bank performance report on 2006, tea
production declined around three per cent prompting the President to
express his concern on the challenges faced by the sector.
Meanwhile, the Annual Report of the Statistics Department for 2006
states that tea, rubber and coconut industries had contributed three per
cent, 10.3 per cent and 6.4 per cent respectively to the 7.7 per cent of
GDP growth in 2006.
The Government has also announced a programme to reduce the cost of
production of tea with particular emphasis on the Tea Small Holders who
contribute some 73 per cent to total production.
The Plantations Minister is quoted to have said that ‘by up-grading
the standard of the Tea Small Holders, solutions can be found for the
problems of the workers in the tea industry’.
The loan subsidy granted to the Small Tea Holders is also set to be
increased from Rs. 190,000 to Rs. 200,000 per acre of tea plantations
land. Source:
Research Intelligence Unit (2007). |
