Softening of tea prices unlikely to hurt earnings: Capital Trust Research

The tea prices are likely to soften, due to the seasonal demand coming off; however, it is unlikely to hurt the earnings, Capital Trust Research said.
While the tea prices have exhibited a notable upward trend, commencing from November 2023, the trend could be attributed predominantly to a decrease in supply, resultant from the changes in the weather conditions. This is coupled with the heightened demand in the market, attributed to Ramadan and also the winter season that ended, according to Capital Trust Research.
However, in January, tea production recorded a marginal increase to 18.7 million kilogrammes, from 18.4 million kilogrammes from a year ago, due to the favourable weather and availability in fertiliser. 
Nevertheless, this increase is considered relatively insignificant compared to the high production levels seen during the last three to 
four years.
It is noteworthy that this upward momentum in price has not continued in the past three weeks. “Given the factors such as the appreciation in the rupee, winter season coming to an end and Ramadan nearing final days, it is anticipated that a short-term decline in prices may occur. However, this decline is not expected to be substantial and affect the earnings significantly,” Capital Trust Research said.

Tea auction sees 5.19 MnKgs come under hammer this week

The Colombo Tea Auction saw 5.19 million kilogrammes (Mnkg) of tea come under the hammer this week, of which 2.02 Mnkg were the Low Grown Main Grades and 1.85 Mnkg were the High and Mid Grown Main Grades. 
In the Leafy and Semi leafy catalogues, the select best BOP1s maintained; however, the corresponding OP1s declined substantially. The below best varieties maintained, whilst the poorer sorts gained, Asia Siyaka Commodities said.
The well-made OP/OPAs were fully firm, whilst the poorer sorts gained. A few select best Pekoe/Pekoe1s maintained, whilst a high percentage of best and below best Pekoes remained unsold, due to the lack of suitable bids. The select best FBOP/FBOPF1s maintained. However, the below best FBOPF1s declined whilst the corresponding FBOPs maintained. 
The teas at the lower end were fully firm. In the Premium Flowery catalogues, the tippy teas met with good demand. 
The Ex-Estate teas met with less demand. The Best Western BOPs declined following quality. The others too were lower this week. The high-priced BOPFs declined sharply. The below best and others were irregular. The Nuwara Eliya BOP/BOPFs were firm on last. The Udapussellawa BOPs were lower up to Rs.50, whilst the BOPFs were irregularly lower. 
The Uva BOPs were dearer on special inquiry. The others were easier.