Colombo Tea Auction this week records highest offering since June 2021

• However, lower quality placed downward pressure on prices
• Strengthening of rupee against USD further impacted prices
• Tea brokers say going forward auction averages would reflect lower values even in USD terms

The Colombo Tea Auction broke the recurrent trend of dampened offerings, with the largest volume since June 2021 coming under the hammer this week. The auction offering expanded to 7.2 MnKgs, the highest since Sale No. 24 of June 21/22, 2021, where quantities totalled 7.3 MnKgs.
However, despite the significant increase in volumes, the lower quality of the offering placed downward pressure on the prices. The strengthening of the Sri Lankan rupee further impacted on the prices quite significantly on day two of the auctions, compounding the market dynamics, Forbes and Walker Tea Brokers said.
“Following this week’s prices, the Colombo Auction averages would now reflect lower values even in dollar terms compared to the corresponding period of last year, perhaps primarily on account of the increased availability and instability in the USD/SLR parity rate,” the tea broker said in its latest tea market report.
The Ex-Estate offerings recorded an increase and totalled 1.1 MnKgs. The overall quality of the teas was lower to last, with a greater availability of the offerings, comprising of average to plainer quality teas. Overall, a price dip of Rs.100-150 per kg and up to Rs.200 per kg was experienced towards the close, following the strengthening of the Sri Lankan rupee during the course of the morning. 

The High and Medium Grown CTC teas too recorded a similar trend and often declined Rs.100-150 per kg, whilst the corresponding Low Grown types were lower but to a lesser extent.  
In the Off Grades catalogues, the liquoring teas continued to weaken in keeping with its Main Grades counterparts. The Brokens declined Rs.20-40 per kg, whilst it was encouraging to witness the strength at the bottom end of the market. The Low Growns comprised of 3.0 MnKgs. The Leafy, Semi Leafy and Tippy catalogues met with lower demand. In the Leafy and Semi Leafy catalogues, a selection of select Best OP1s was firm, whilst the others were lower. The Select Best BOP1s declined substantially, whilst the balance too was easier to a lesser extent. The OP/OPAs together with the PEK/PEK1s too declined.
In the Tippy catalogues, the well-made FBOPs were firm, whilst the balance was easier. The FF1s, in general, were lower. In the Premium catalogues, the very Tippy teas declined, whilst a few cleaner Below Best varieties maintained. The balance too declined and was mostly unsellable, due to a lack of suitable bids.