Colombo tea auction concludes final sale for 2021

• Good demand observed during final sale for year
• Year 2021 delivers mixed results for tea industry
• Pandemic and work disruptions continue to impact smooth functioning

The Colombo tea auction concluded the 50th sale yesterday, also the final sale for the year 2021, where there was a good demand for the 5.3 mn kg of tea that came under the hammer.

Ex-estate offerings were limited to 0.75 mn kgs, which saw improved demand triggered by the absence of an auction next week and the general decline in availability in the forthcoming sales, Forbes & Walker Tea Broker said in its latest tea report. 

Best Western BOP/BOPF continued to sell around last week’s levels. In the Below Best category, BOPs were irregular, whilst the corresponding BOPFs gained Rs.10-20 per kg.

High and Mid Grown CTCs – BP1s were irregular with a selection of the Mid Grown types appreciating in value. 
Low Growns comprised 2.2 mn kgs in the Leafy/Semi Leafy and Tippy catalogues, where a good demand was observed for well-made teas.

In the Premium catalogues, Very Tippy teas continued to attract good demand. Best and cleaner Below Best were firm to dearer, whilst the balance were easier following quality, the report highlighted.

Furthermore, an analysis by Forbes & Walker Tea Brokers highlighted that although the economic conditions eased this year, following the outbreak of the COVID-19 pandemic in 2020, the year 2021 could be considered as challenging for the tea industry, leading to the delivery of mixed results. “The ripple effects of the different waves of the COVID-19 pandemic and the intermittent disruption to regular work continued to impact the smooth functioning of the industry. In this backdrop, the industry performance delivered mixed results,” said Forbes & Walker Tea Brokers in its latest report. Highlighting the key performance indicators for the year 2021, production recorded a year-on-year (YoY) increase of 10 to 12 percent. For the January-November 2021 period, cumulative production reached 278.75 mn kgs, recording a gain of 28.56 mn kgs when compared with the corresponding period in 2020. On a cumulative basis, all elevations have shown substantial gains over the corresponding period of 2020, the report stated.

Meanwhile, the auction prices weakened in LKR terms (Rs.11-13) and to a greater extent in USD terms (US $ 0.25-0.30). However, export earnings expanded approximately by 15 percent.