COLOMBO TEA AUCTION 03/06/2015

C O M M E N T S

********************

A large volume of 8.1 M/Kgs was on offer this week. There was fair demand at irregular rates.

Ex-Estate offerings comprised of 1.3 M/Kgs. Here again, there was fair demand particularly for teas at the lower end of the market. Best Western BOP’s continued to decline following quality whilst the corresponding BOPF’s were irregular-once again following quality. BOP’s in the below best category declined Rs. 10-20/- per kg whilst the corresponding BOPF’s were irregular. Plainer BOP’s sold around last week’s levels whilst the corresponding BOPF’s which commenced Rs. 10-15/- per kg dearer appreciated further as the sale progressed. Nuwara Eliya BOP/BOPF’s declined by Rs. 20/- and Rs. 30/- per kg respectively whilst Uva/Udapusselllawa BOP/BOPF’s sold around last week’s levels. High and Medium Grown CTC teas continued to witness a bearish market whilst the Low Growns witnessed a firm to marginally dearer trend. Liquoring leafy teas witnessed less demand although prices still remained attractive and ranged between Rs. 450/- to 1400/- per kg.

Shippers to the CIS continued to be reasonably active together with Japan, South Africa and Hong Kong. The UK and the Continent continued to be selective.

Low Growns comprised of approximately 3.6M/kgs in the Leafy/Tippy catalogues. There was good demand. In the Leafy catalogue better OP/OPA’s mostly sold around levels whilst the others were irregular and marginally lower. PEK/PEK1’s too were fully firm to dearer with the bolder PEK’s in general gaining Rs.10-20/- per kg. Select best OP1’s were barely steady. Others and BOP1’s were however fully firm. In the Tippy catalogue too better FBOP/FF1’s together with the cleaner secondaries which were fully firm to irregularly dearer at the commencement, eased marginally towards the close. At the lower end too, cleaner types were firm, balance were barely steady. Better Tippy invoices too were selectively dearer, particularly where quality was maintained whilst the balance were irregularly lower. There was good demand from Shippers to CIS, Turkey, Dubai, Iraq, Saudi Arabia together with Kuwait this week.

Monthly Auction Averages - May 2015

Auction average for the month of May 2015 totalled Rs.396.55 showing a decrease of Rs.81.07 vis-à-vis Rs. 477.62 of May 2014. This also reflects a decrease in USD terms vis-à-vis the corresponding month of 2014. High Grown average totalled Rs.364.58 for the month of May 2015 showing a decrease of Rs.52.53 vis-à-vis Rs. 417.11 of May 2014. Medium Growns too totalling Rs.355.74, show a decrease of Rs.65.68 vis-à-vis Rs.421.42 of May 2014. Low Growns totaling Rs.422.41 for May 2015 show a fairly significant decrease of Rs.93.93 vis-à-vis Rs.516.34 of May 2014. It is relevant to note that these averages reflect a decline even in USD terms compared to the same period of 2014. (See more details in page no.8)

When analyzing the January - May cumulative auction average of Rs. 412.27, show a decrease of Rs.67.92 vis-à-vis Rs.480.19 of January - May 2014. High Growns too for the period January - May 2015 totalling Rs.390.91 show a decrease of Rs.42.01 vis-à-vis Rs.432.92 of January - May 2014. Mediums too totalling Rs.376.43 show a decrease of Rs.50.10 vis-à-vis Rs.426.53 of 2014. Low Growns totalling Rs. 428.29 shows the highest negative variance of Rs.82.03 vis-à-vis Rs.510.32 of 2014. Here again these levels are lower to 2014 price levels in USD terms as well. Another noteworthy feature is these levels are also lower to 2013 levels both in SLR/USD terms.

********************