ECONOMYNEXT – Sri Lanka’s Colombo Tea Auction is staring another e-auction Thursday combining volumes of two auctions together amidst low production due to unfavorable weather in early March and a Coronavirus crisis, industry officials said.
“Due to low volumes we have put two auctions together,” said Yshan Fernando, Managing Director of Forbes and Walker Tea Brokers Ltd.
“Normally, Colombo will have about 6 million kilos of tea but due to the dry weather we experienced in early March the volumes have come down to about 3-4 million kilos.”
The brokers are hoping to sell about 6.8 million kilos.
“During this week, the auction will be spread out over a period of three days from April 16th, 17th and 18th.
This week’s auction started at 0800h and will continue until April the 18th 1700h
Sri Lanka digitized its 127-years old traditional open outcry tea auction last week amid social distancing rules of Coronavirus, but it is slower than the manual one so war.
“In last week’s auction, we had demand from most markets because we didn’t have the auction for over two weeks and the volumes were low so there was a lot of activity plus the depreciation of the rupee too would have triggered some demand,” said Fernando.
“We are hoping we will have fairly good demand because of last week’s demand pattern, so we expect the same kind of trend to continue.”
Tea brokers said even though time was a crucial factor, the tea traders gave space for buyers and brokers to take one step at a time at the electronic platform.
Colombo saw a lot of demand from its buyers last week as the previous auctions was suspended due to the novel coronavirus outbreak in the country.
Brokers said that heavy buying came from Iraq, Turkey, and Syria while China and Hong Kong remained active participants while the overall market remained active.
Last week’s sale volume was 4.5 million kilos. This week there may be some pressure on prices but brokers say they expect prices to hold up. (Colombo/Apr16/2020-sb)