Thursday Sep 19, 2024
Thursday Sep 19, 2024
Thursday, 16 April 2020 00:00 - - {{hitsCtrl.values.hits}}
Encouraged by the success of the maiden effort, the tea industry is continuing with eAuctions, with this year’s Sale Number 13 starting today, and the next sale on Saturday, via the proven and robust electronic platform.
The electronic auction was pursued due to the curfew and social distancing initiatives on for over three weeks as part of the Government’s broader novel coronavirus (COVID-19) mitigation measures in the country.
Today’s Sale will have 7,946 lots while tomorrow’s Sale will feature 5,273 lots.
The first eAuction saw 8,340 lots with over 4 million kilos of tea sold for Rs. 3 billion. The conduct of eAuction ensured the tea industry continued to contribute to the economy’s wellbeing, despite the partial shutdown of the country owing to the COVID-19 pandemic.
The Colombo Tea Traders’ Association and the Colombo Tea Brokers’ Association, along with e-platform provider CICRA Solutions, have agreed on four catalogues on sale simultaneously to expedite the auction.
Sale Number 12, which was scheduled for 24 and 25 March, was eventually held via the electronic platform over five days from 4 to 8 April.
Given the maiden initiative, the eAuction began with around 1 or 2 catalogues per minute and progressed to 3 catalogues per minute.
Forbes and Walker Tea Brokers, commenting on the first ever eAuction, said the trade witnessed a buoyant market all round, emanating from a combination of improved demand in the backdrop of low volumes and the weakening of the Sri Lankan rupee against the US dollar - approximately 10% devaluation of the Sri Lankan rupee from the previous auction. This augurs well for Ceylon Tea prices, particularly in rupee terms.
“All categories of tea appreciated by Rs. 30-50 per kg and substantially more for a fair weight of the offerings, with hardly any teas remaining unsold. However, the Tea Auctions are now behind by almost 2 weeks, which has significantly impacted the cash flows of the producer sector,” Forbes and Walker added.
Forbes and Walker Tea Brokers also recounted in its weekly report that COVID-19 changed the world in many ways, including shifting the Colombo Tea Auction from its famous outcry system to a digital auction system. “Once again, the industry showed its resilience by rising to the occasion in digitalising the auction in a very short period of time, which was facilitated by the Colombo Tea Traders› Association (CTTA) and supported by the Colombo Brokers› Association (CBA) and CICRA Holdings,” Forbes and Walker said.
It said the coronavirus outbreak has left the global economy looking bleak, with likely recessions in many developed economies across the world.
“Whilst there may be some recovery in the second half of the year, the downside risks still remain high. At this stage, it is unlikely that the lockdowns would be relaxed, which means that the uncertainty would continue where lower fiscal revenues and higher public spending would put many countries into a slump,” Forbes and Walker Tea Brokers opined.
John Keells Ltd. in its report said, “History was created when the very first online tea auction was held in Sri Lanka on Saturday 4 April 2020 in the backdrop of an absence of holding the weekly tea auctions for two weeks, due to the global crisis created by the COVID-19 pandemic. Since the inception of the first outcry tea auction, which was held in 1887 in Ceylon, as we were known then, it was considered to be one of the most efficient and well managed tea auction centres on the global platform over the years.
“In order to support the $1.5 billion revenue earning trade to function amidst challenging times together with encouragement and the support of the state and all stake holders, an e-platform was introduced to ensure that the auction process is continued. The tea trade has been the backbone of the economy for many years, proving once again the resilient nature of the 150-year-old industry and its people directly and indirectly involved, that has withstood external and internal strife time and again with a spirit of courage and determination second to none,” John Keells added.
Commenting on the eAuction itself, the broker said the 0.72 Mkgs of ex-estate teas on offer met with exceptional demand. All types of Western High Grown BOPs and BOPFs advanced sharply. There was good demand for the Nuwara Eliya BOPs in particular and the BOPFs too sold well. Udapussellawa BOP and BOPFs appreciated over last levels. Uva BOP/BOPFs too gained in value. CTC Low Grown BP1s were firm on last levels. The PF1s appreciated. The High and Medium Grown BP1s gained. The PF1s too were mostly dearer.
John Keells said the 1.6 Mkgs of Low Grown teas which were on offer met with excellent demand. Select best OP1s appreciated substantially, others too improved by high margins. BOP1s met with excellent demand. All OP/OPAs met with excellent demand. Bold Pekoes showed an improvement to last, Pekoe1s were dearer. In the small leaf segment, select best BOP.SP/ BOPF.SP and BOPFs met with improved demand. BOP varieties gained several rupees. FBOPs met with excellent demand. Demand for FBOPF1s were substantial. FBOPF varieties too met with excellent demand. Premium Flowery teas were firm.
Russia, Turkey, Iran and the C.I.S. countries lent excellent support. Libya and Iraq were very active, it added.
