Tea auctions this week

Strong and widespread demand for Low Growns together with improved interest for High Grown offerings culminated in healthy prices for most teas at this week’s auction.

This trend is expected to continue as plantation crop intakes have been drastically reduced in recent weeks following very dry weather conditions.

Reports from the High Grown regions indicate a crop reduction of over 50% in their daily intakes, whilst the Low Grown sector is more severe with factories receiving very low volumes of Green Leaf, barely enough to carry out manufacture on a daily basis.

Despite the high prices currently being enjoyed, the cost of manufacture has seen a phenomenal increase, as a direct consequence of the sharply reduced crops being received for manufacture. There is a rapid decline in auction offerings for the sales closing currently.

Sale No. 6 of 9 February 2011 which closed last Friday has only 6.1 MKGS on offer which is a drop of 1.3 MKGS from the quantity on offer at sale No. 5 of 2 February 2011. A further drop in sales volumes of the catalogue scheduled to close this week is therefore sure to be expected. RPC Estates have been quick to anticipate the vagaries of weather and the possible harmful effects of global warming on tea cover and have taken meaningful action to implement appropriate Good Agricultural Practices (GAP) where the water retention properties of the soil have been greatly enhanced, but what of the small holder sector that controls the majority of our planted area?

Sufficient knowhow must be made available to the smallholders by the authorities responsible for the development of this sector, as the very sustainability of our tea production over the 320 MKGS level would depend on the contribution of the smallholder sector to the national crop.

(Source: Lanka Commodity Brokers)