ECONOMYNEXT – Sri Lanka’s Ceylon tea prices fell 100 to 200 rupees at an auction on March 08 due to rupee strengthening steeply, amidst good demand, brokers said.
Prices of all High, Medium and Low Growns saw fell this week.
Falling tea prices, which are accompanied by falling, wheat, sugar and food prices will reduce the demand for higher wages from workers, though it may reduce profits.
Tea firms have not yet hiked wages after the central printed money, depreciated to rupee and pushed up food prices.
When currencies fall, the prices of all traded goods inflate, not just imports.
Total auction volume was 5.2 million kilograms and there was good general demand, Ceylon Tea brokers said in a report.
The weekly sale average fell from 1471.03 rupees to 1267.07 rupees from a week ago, according to data.
“At the commencement of the sale, large volumes of tea were unsold with bids realised being significantly below the percentage appreciation of the Sri Lankan Rupee,” Forbes and Walker said.
“As the sale progressed some degree of stability was reached although rupee prices, on average, recorded a decline of 200-300 rupees per kg and on the higher selling grades, perhaps up to 300-400 rupees per kg vis-à-vis the previous week’s levels,
“The total unsold volumes would perhaps be in the region of approximately 15-20 percent”.
The High Grown sale average was down by 164.93 rupees to 1,275.12 from 1,440.05 rupees last week, Ceylon Tea Brokers said.
BP 1 was down by 100 rupees.
BOP and PF1 were down by 200 rupees while BOPF was down by 300 rupees per kilogram.
“Ex-Estate offerings totalled 0.72 million kilos up from the 0.65 million kilos of the previous week,” Forbes and Walker said
“Good demand though prices took a dip following the strengthening of the Sri Lankan Rupee”.
Well-made OP/OPA’s declined sharply, whilst teas at the lower end too fell.
A limited selection of Flavory PEK’s that were available were irregularly went down.
Orthodox leafy PEK’s in general were down by 100-200 rupees per kilo, whilst PEK1′ in general were down by 200 – 300 rupees per kg.
Best Rotavane PEK’s went down by 100 rupees per kilo and more. Others declined to a lesser extent.
In Low Grown Teas, OP1 and OP/OPA were down by 150 rupees.
BOP 1 was down by 175 rupees while PEK was down by 200 rupees.
The Low Growns sale average was down 229.95 rupees to 1296.98 rupees last week.
Low Growns comprised of 2.4 million kilograms.
“Leafy/Semi Leafy and Small Leaf categories met with lower demand and prices declined further as the sale progressed,” Forbes and Walker said.
In the Leafy and Semi Leafy catalogues, few select OP1’s were firm, whilst the balance declined sharply.
In PEKOE/PEKOE1 select best teas together with full range of bold PEKs declined.
Cleaner below best and the rest were irregular while in FBOP/FBOP1 select best and best had a sharp decline whilst others had a lower market, Ceylon tea brokers said.
Medium Grown FBOP and PEK 1 were down by 250 rupees while FBOPF1 and OP1 were down by 200 rupees.
The Medium Growns sale average was down by 153.36 rupees to 1,109.89 rupees last week.
BOP1 was down by 100 rupees per kilo whilst others fell by 150 rupees.
In OP1 select best fell by 100 rupees per kilo whilst others lower by200 rupees.
In OP/OPA select best and best were down by 200 rupees per kilo whilst below best others fell by 150 rupees. (Colombo/Mar 12/2023)