ECONOMYNEXT – Despite a slight upturn in tea prices at recent auctions the recovery has been confined only to the best varieties with others still fetching prices below their cost of production, brokers said.
There was good demand at this week’s auction especially from the key Russian and Middle Eastern buyers, they said.
“With almost ten months of the year gone by, plantations have had no respite from moderate crops and weak markets witnessed particularly during the second half of 2015,” John Keells Ltd. said.
“Although at recent Ex-Estate sales, we have witnessed a slight revival in prices particularly for the BOPF grade with Russia and the Middle East showing good inquiry, price levels for below best and plainer teas continue to fall well short of production costs.”
In the Low Grown category of teas, which make up the bulk of production and are grown mainly by small farmers, there has been a “significant improvement in prices,” John Keells said.
However, they said, market conditions continue to be volatile.
The best Nuwara Eliya BOP type teas gained sharply in price at this week’s sale, brokers Asia Siyaka Commodities said.
But seasonal Uva BOP types fell sharply following quality, except for a few select invoices, they said. (Colombo/October 30 2015)