By Steve A. Morrell
Weakness of the Russian rouble and economic woes in the Middle East hurt by depressed oil prices are likely to drive down tea prices further hurting the tea industry here according to trade sources.
These and other concurrent phenomena have seriously affected tea sales at the Colombo auctions over the past few weeks and the signs that the market depression would continue over the short run.
CEO John Keells (Tea Brokers), Sudath Munasinghe said currently there was no real silver lining to this dark cloud. The only consolation was that Ceylon tea was not the only casualty affected by the Russian rouble. Other auction centers too were running at losses with Calcutta, Mombasa and Chittagong subject to ‘red line’ performances.
Middle East buying currently at reduced levels seriously affected Colombo. Additionally, the New Year in Iran hurt the market. Tea Board officials were not available for comment.
The John Keells tea market report last week said that Sri Lankan tea sales averages showed negative variance from a year earlier. Selling at an average Rs. 424.14 was ‘a staggering’ Rs. 85.64 below January last year. The brokers feared the negative trends would continue.
Additionally, the expected Western quality season was cut short by lashing rains that affected districts beyond Hatton. Low growns too saw price depression, down Rs. 102.60 per kilo from a year earlier. These teas with strong market acceptance in the Middle East had seen price declines due to restricted buying by Middle Eastern countries, the report said.
The Asia Siyaka tea market report too did not offer any optimistic comments. Crops were low and prospects for short term price improvements were remote.
The Planters Association late last year complained that productivity on the estates had dropped and called for a minimum two kilos per day crop intake increase by pluckers citing productivity in other tea growing countries.
However brokers did say that although in general terms the bulk of the industry was still dependent on traditional markets, there were smallholders who have found markets in the US and EU countries and were selling well at dollar prices.
www.island.lk
These and other concurrent phenomena have seriously affected tea sales at the Colombo auctions over the past few weeks and the signs that the market depression would continue over the short run.
CEO John Keells (Tea Brokers), Sudath Munasinghe said currently there was no real silver lining to this dark cloud. The only consolation was that Ceylon tea was not the only casualty affected by the Russian rouble. Other auction centers too were running at losses with Calcutta, Mombasa and Chittagong subject to ‘red line’ performances.
Middle East buying currently at reduced levels seriously affected Colombo. Additionally, the New Year in Iran hurt the market. Tea Board officials were not available for comment.
The John Keells tea market report last week said that Sri Lankan tea sales averages showed negative variance from a year earlier. Selling at an average Rs. 424.14 was ‘a staggering’ Rs. 85.64 below January last year. The brokers feared the negative trends would continue.
Additionally, the expected Western quality season was cut short by lashing rains that affected districts beyond Hatton. Low growns too saw price depression, down Rs. 102.60 per kilo from a year earlier. These teas with strong market acceptance in the Middle East had seen price declines due to restricted buying by Middle Eastern countries, the report said.
The Asia Siyaka tea market report too did not offer any optimistic comments. Crops were low and prospects for short term price improvements were remote.
The Planters Association late last year complained that productivity on the estates had dropped and called for a minimum two kilos per day crop intake increase by pluckers citing productivity in other tea growing countries.
However brokers did say that although in general terms the bulk of the industry was still dependent on traditional markets, there were smallholders who have found markets in the US and EU countries and were selling well at dollar prices.
www.island.lk
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