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Sri lanka’s tea production in May improves by 1.57% YoY
Sri Lanka’s tea crop witnessed a marginal improvement in the month of May, with production expanding by 1.57 percent year-on-year (YoY). Tea production in the month of May totalled 26.52 MnKgs, showing an increase of 0.41 MnKgs from May 2022. The High Growns have shown a marginal increase, whilst the Medium Growns and Low Growns have shown a marginal decline in comparison with the corresponding period of 2022. Compared to 31.10 MnKgs of May 2021, May 2023 shows a decrease of 4.58 M/Kgs. However, other than the dip in February, the monthly figures show tea production is on an increasing trend. This is attributed to the availability and application of fertilisers. The cumulative analysis shows that production for the January to May 2023 period totalled 111.09 MnKgs. This is a 1.73 MnKg decrease when compared with the corresponding period in 2022. All elevations, barring the Green Tea segment, have shown negative variances in the year 2023.
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In the backdrop of the depreciating Sri Lankan rupee vis-à-vis the US dollar, the Colombo Tea Auction this week saw the rupee tea prices strengthened, following the improved widespread demand. Consequently, a lesser volume of teas remains unsold, the tea brokers said.
“No doubt a welcome recovery from a producer perspective,” said Forbes and Walker Tea Brokers in its latest tea report.
Commencing around March 2023, the rupee tea prices continued to weaken, following the appreciation of the Sri Lankan rupee and volatility in the parity rate.
“Needless to say, such uncertainty impacted the trading conditions, often resulting in the weakening of the rupee tea prices and the buyers making purchases only for immediate shipments,” Forbes and Walker Tea Brokers said.
In terms of offerings, 6.9 MnKgs came under the hammer, similar to that of last week.
The Ex-Estate offerings too were fairly similar to last and totalled 1.0 MnKgs. The overall quality of the teas in most instances was barely similar to last, whilst the prices appreciated by Rs.50-100 per kg for most teas on offer, primarily following the currency advantage.
Commencing around March 2023, the rupee tea prices continued to weaken, following the appreciation of the Sri Lankan rupee and volatility in the parity rate. Needless to say, such uncertainty impacted the trading conditions, often resulting in the weakening of the rupee tea prices and the buyers making purchases only for immediate shipments.
The Low Growns comprised of 2.8 MnKgs. The Leafy, Semi-Leafy and Tippy catalogues met with fair demand.
In the Leafy catalogues, the high-priced OP1s were firm to selectively dearer, whilst the Best and Below Best sold around last levels.
The Cleaner Below Best and cleaner teas at the bottom appreciated, whilst the balance was easier. The BOP1s, in general, maintained. The well-made OP/OPAs were firm, whilst the others were irregular. However, the teas at the bottom were fully firm. The well-made PEKs were irregular, whilst the balance sold around last levels. The well-made PEK1s were firm to selectively dearer, following quality, whilst the poorer sorts maintained.
In the Tippy catalogues, the well-made FBOPs were firm, whilst the cleaner Below Best and cleaner teas at the bottom appreciated. The balance was irregular, following quality. The well-made FF1s together with the Below Best sold around last levels whilst the teas at the bottom were irregular.
In the Premium catalogues, the leafier varieties were firm to dearer, whilst the smaller Tippy varieties in general were easier.
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