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  • Sector - Plantation

    WEEKLY TEA MARKET REPORT
    SALE NO: 32 - 14TH/ 15TH AUGUST 2018

    The overall Auction volumes declined to 6.2M/kgs. Majority of the Low Growns declined in value whilst High & Mid Grown small leaf teas met with improved demand, and consequently, an appreciation in prices for most teas on offer.

    Ex-Estate offerings were fairly similar to last and totalled a 0.8M/kgs. Overall, quality of teas from the Western District were represented with a reasonable all round standard. Nuwara Eliyas and Udapussellawas showed a decline, whilst the Uvas comprised of a fair selection of seasonal teas. Best Western BOPs - select invoices gained substantially whilst the others were firm and up to Rs. 20/- per kg dearer. The corresponding BOPF gained Rs. 20/- per kg and more as the sale progressed. BOP's in the below best and plainer category were irregular, however, a selection of clean leaf plainer BOP's gained Rs. 30-40/- per kg. Corresponding BOPF, which were up to Rs. 20/- per kg dearer, moved up further by the close. Nuwara Eliyas were substantially easier on last, whilst the Udapussellawas were irregular. Uva seasonal teas continued to sell well with 18 invoices realizing Rs. 1,000/- per kg and more. Other coloury teas gained Rs. 10-20/- per kg. CTC teas met with less demand and were Rs. 20-30/- per kg easier for most teas on offer.

    Low Growns totalled approximately 2.9M/kgs in the Leafy/Tippy catalogues. In the Leafy catalogue, well made BOP1/OP1's though irregular were firm. Others were mostly lower. PEK/PEK1's too declined Rs.10-20/- per kg with the bolder types declining further. Here again, a few select best PEK1's maintained. A range of better OP/OPA's were firm. All others declined Rs.5-10/- per kg and more. In the Tippy catalogue, better FBOP/FF1's declined Rs.10-20/- per kg whilst the cleaner secondaries were firm. At the lower end too cleaner types maintained. In the Premium catalogue, FFExSp/FFExSp1's met with fair demand but at lower levels whilst FFExSp's were mostly difficult of sale. There was fair demand from shippers to CIS, Iraq, Saudi Arabia, and Dubai whilst Turkey too was active but to a lesser extent.

  • #2
    Thanks Luke...
    Live Today........
    Without compromising your ability to Live Tomorrow………

    Comment


    • #3
      The golden sector for CSE last year. What will be in 2018 and 2019 going forward.....

      Comment


      • #4
        Now that Glyphosate matter has been resolved for plantations, and they expect the 1st shipment by October this year. No threat of japanese ban etc. world weaker commodity prices weighing the tea industry. any turnaround should be a welcome news for the betterment of srilanka economy and stakeholders.
        "The best values today are often found in the stocks that were once hot and have since gone cold"

        Comment


        • #5
          Glyphosate: First shipment due in October

          Glyphosate, which is currently a subject of fierce controversy world over will once again be in use in the plantation sector as the preferred weed killer with the first batch of imports expected in October since the ban on the weedicide was lifted mid this year, a top official of the Ceylon Petroleum Corporation (CPC) told the Sunday Observer

          CPC Agro Chemical Manager Suranga Perera said around half a million litres of Glyphosate will be imported by end of next month or early October for tea and rubber plantations.

          “The CPC plays only an intermediate role. Selection of suppliers is done by the Registrar of Pesticides after the Pesticide Technical and Advisory Committee evaluates samples. The quantity to be imported is decided by the Plantations Ministry,” he said.

          The requirement of Glyphosate in the country is around one million litres per annum. Currently the use of Glyphosate is permitted only for tea and rubber plantations and importing of the weedicide is permitted under a controlled amount. The widely used herbicide ran further into trouble recently after a US court ordered Monsanto, an agro-chemical company to pay $ 290 million as compensation to a groundskeeper who was diagnosed with cancer after repeatedly using Roundup. Glyphosate an active ingredient in Monsanto’s weedkiller Roundup is classified by the World Health Organization as “probably” being carcinogenic.

          The weed killer was banned in Sri Lanka in 2015 following speculation that the agro-chemical contained carcinogenic substances. However, despite the opposition to the use of the weedicide so far there has not been scientific proof to confirm that the weed killer has the potential to cause cancer.

          A San Francisco court ordered Monsanto to pay $250 million in punitive damages and nearly $40 million in compensatory damages and other costs to Dewayne Johnson,a California groundskeeper diagnosed with non-Hodgkin’s lymphoma, a cancer that affects white blood cells.

          However, the agrochemical giant insisted that the court decision “does not change the fact that more than 800 scientific studies and reviews... support the fact that glyphosate does not cause cancer, and did not cause Johnson’s cancer.”

          Germany’s Bayer, which acquired Monsanto for $63 billion mid this year had stated it was “convinced glyphosate is safe and does not cause cancer.”

          Following years of heated debate, EU member states decided to renew the licence for glyphosate for another five years at the end of 2017.

          The Government Medical Officers’ Association which has been an ardent campaigner against the use of Glyphosate has called upon the health minister to reveal who permitted the lifting of the ban on the weedicide.

          However, the plantation sector faced a severe blow as its crop yield dwindled drastically resulting in low exports. The tea sector lost about 5-10 percent of production due to the ban last year.

          Former Sri Lanka Tea Board Chairman Dr. Rohan Pethiyagoda said tea production last year would have increased by another five to 10 percent and about 10-20 billion revenue if not for the ban on Glyphosate which put the industry in deep trouble. SLTB expects tea production this year to surpass last year’s figures of 307 million kgs to touch around 330 million kgs this year with an auction price of around Rs. 620 per kg.

          Tea production last year recorded a five percent growth in yield and the export earning was US$ 1.5 billion.
          Live Today........
          Without compromising your ability to Live Tomorrow………

          Comment


          • #6
            Thanks PAT.

            Comment


            • #7
              WEEKLY TEA MARKET REPORT
              SALE NO: 33 - 20TH/ 21ST AUGUST 2018

              The 33rdsale of the year concluded today had on offer a total of 6.36M/kgs. Low Growns continued to witness a bearish sentiment amidst the US sanctions on Iran and the Turkish currency crisis, whilst High & Mid Grown small leaf teas met with good demand at fairly remunerative prices.

              Ex-Estate offerings totalled 0.75 M/kgs marginally below last week's quantity of 0.8 M/Kgs. Overall, quality was fairly similar to last with a fairly useful range of seasonal quality teas from the Eastern sector (Malwatte Valley Region). Select high priced BOP's of last week declined in value, whilst the others appreciated Rs. 10-20/- per kg. Corresponding BOPF were firm and Rs. 10-20/- per kg easier. BOP's in the below best category were Rs. 10-20/- per kg dearer, whilst corresponding BOPF were irregular. Plainer BOP's Rs. 20/- per kg dearer, whilst corresponding BOPF declined Rs. 10-20/- per kg on last week's closing levels. Select high priced Nuwara Eliya BOP's of last week were substantially easier, whilst the others appreciated Rs. 20-30/- per kg. BOPF Rs. 10-20/- per kg lower. Udapussellawa BOP's gained Rs. 20-30/-, whilst corresponding BOPF were barely steady. Uva - seasonal BOP's were slightly easier. Corresponding BOPF - select invoices substainally dearer. Others Rs. 30-40/- per kg dearer. Coloury BOP's Rs. 20-30/- per kg lower. BOPF firm. CTC BP1's were irregular and marginally easier. PF1's irregular and generally sold around last.

              Low Growns totalled 2.9M/kgs in the Leafy/Tippy catalogues this week. There was fair demand. In the Leafy catalogue, select best BOP1/OP1's were generally firm whilst others declined. Better OP/OPA's too were mostly irregular and lower with the exception of cleaner teas at the lower end which were fully firm to irregularly dearer. PEK/PEK1's too were irregular and lower. Here again, a selection of bolder PEK's maintained. In the Tippy catalogue, select best FBOP/FF1's together with the cleaner secondaries were fully firm to selectively dearer. Others were irregular and lower. At the lower end too cleaner types were fully firm. In the Premium catalogue, a selection of FFExSp/FFExSp1's were fully firm whilst others mostly lower. There was good demand from shippers to CIS, Dubai, Iraq, Libya, and Saudi Arabia. Turkey too was active but to a lesser extent.

              Comment


              • #8
                SRI LANKA TEA PRODUCTION - JULY 2018

                Sri Lanka Tea Production for the month of July 2018 totalled 23.8M/kgs recording a decrease of 1.8M/kgs vis-à-vis 25.7M/kgs of July 2017. All elevations have shown a decrease YOY with High Growns recording the highest decrease. (As detailed on page no.11)

                When analyzing the cumulative total for January-July 2018 of 182.2M/kgs vis-à-vis 182.4M/kgs of January-July 2017 a marginal decrease of 0.2M/kgs is recorded. On a cumulative basis, Low Grown elevation together with the Medium Growns have shown a marginal gain YOY whilst High Growns have shown a decrease when compared to the corresponding period of 2017.

                CTC production for the month of July 2018 of 1.7M/kgs records a 0.14M/kgs decrease compared to 1.8M/kgs of July 2017. Low Growns show a marginal growth whilst High and Medium elevations show a decrease for July 2018 when compared to the corresponding month of 2017. On a cumulative basis however, January-July 2018 CTC production of 13.9M/kgs show a growth of 1.5M/kgs vis-à-vis 12.4M/kgs of January- July 2017. On a cumulative basis, High and Medium Growns show a growth YOY whilst Low Growns show a marginal decrease to the corresponding period of 2017.

                Comment


                • #9

                  SRI LANKA TEA EXPORTS - JULY 2018 -VOLUME LOWER 1.4M/KGS VALUE LOWER RS.2.0B
                  Sri Lanka Tea exports for the month of July totalled 25.2M/kgs showing a decrease of 1.4M/kgs vis-à-vis 26.6M/kgs of July 2017. When analyzing the main categories of exports i.e. Tea Bags, Packeted tea and Bulk tea, a decrease is shown when compared to the corresponding month of 2017. Total revenue too realized for July 2018 of Rs.19.9B show a deficit of Rs.2.0B vis-à-vis Rs.21.9B of July 2017. This also has resulted in the FOB value declining to Rs.791.40 for July 2017 when compared to Rs.823.26 of the corresponding month of 2017 thus showing a decrease of Rs.31.86.

                  Cumulative exports for the period January-July 2018 totalled 162.7M/kgs vis-à-vis 165.3M/kgs of January-July 2017, showing a decrease of 2.6M/kgs. On a cumulative basis too Tea Bags, Packeted tea and Bulk tea show a decrease in 2018 compared to the corresponding period of 2017. Meanwhile, total revenue realized for the period January-July 2018 of Rs.133.8B have shown a gain of Rs.1.4B vis-à-vis Rs.132.4B of January-July 2017. Consequently the total FOB value for the period of January-July 2018 realized Rs.822.44 recording a gain of Rs.21.76 vis-à-vis Rs.800.68 of January-July 2017.

                  Iraq has emerged as the largest importer for the period January-July 2018 followed by Turkey and Russia whilst Iran has occupied the 4th position. Other noteworthy importers are UAE, China, Syria, Azerbaijan and Libya. It is also relevant to note that destinations such as Japan, Ukraine, Australia and Lebanon have shown a decrease in imports for the period under review.

                  Comment


                  • #10
                    Japan was understood for the decline. What about others! Australia etc. So couple of more quarters would reveal.
                    "The best values today are often found in the stocks that were once hot and have since gone cold"

                    Comment


                    • #11
                      Tea Board chairman confident Iran issue will be solved soon

                      Negotiations on transactions with Iran are in progress between the Central Bank and the Finance Ministry, a top official of the Sri Lanka Tea Board (SLTB) told the Sunday Observer.

                      Sri Lanka’s tea exports to Iran declined by around 19 percent to 27.4 million kgs last year. The US reimposing sanctions is expected to put a damper further on exports to a key market for Sri Lankan tea.

                      SLTB Chairman Lucille Wijewardena said discussions on payments with Iran have been continuing and we are confident the issue will be solved soon to go ahead with exports to Iran, a major market for Ceylon Tea.

                      “It is up to the policy makers to decide the mode of transaction between the two countries and come up with a solution,” the SLTB chief said.

                      The spillover effect of the embargo on Iran has been felt in Iraq as well which has been a large market for Ceylon Tea since this year.

                      Exporters said the sector would run into a major crisis if the plight in the Middle East, Russia and Turkey stemming from the US sanctions on these markets is not handled carefully and diplomatically.

                      Overall exports in particular tea is currently in a precarious state owing to the ongoing trade battle between two key markets the US and China, the US sanctions on Iran and its dispute with Turkey having spillover effects on other major markets have resulted in a drastic drop in both export value and volume in the recent months.

                      Exporters say there has been a sharp decline in exports income right throughout the year due to the turmoil in the Middle East, a key market for Sri Lanka’s exports and the weakening of the Russian Ruble since the US sanctions came into effect early last year.

                      Sri Lanka’s total exports to the US are valued round US$ 2.4 billion and to Iran in volume around 27. 4 million kgs a year. The Middle East and Russia account for approximately 70% of Sri Lanka annual tea export volume.

                      Tea Exporters Association (TEA) President Jayantha Karunaratne said Sri Lankan tea exporters currently face a number of challenges in marketing Ceylon Tea due to internal and external factors.

                      He said some of the countries in Middle East are comparatively high risk markets due to constant political and civil conflicts and international sanctions. Sri Lanka tea trade has suffered heavily due to military conflict in Syria, political instability in Libya and international sanctions on Iran.

                      The reimposition of US sanctions on Iran from August this year has badly affected the Iranian Riyal. During the last two to three weeks the Iranian currency dropped from Riyal 42,000 to Riyal 110,000 per dollar.

                      According to exporters what makes matters worse is the trade embargo restricting Iran dealing in US dollars with the rest of the world.

                      “The US sanctions restricting Iran dealing in USD makes the situation more complicated. As a result Iranian buyers find it difficult to transfer the payment due to local suppliers,” Karunaratne said.

                      The diminishing purchasing power of consumers has restricted imports from sanction hit countries. It is also reported that buying power of the Iranian consumer has reduced with the sharp depreciation of the currency. The situation in Iran has spilled over to neighboring Iraq as well as many Iraqi business people have invested their funds in Iranian banks. The sharp depreciation of the Iran Riyal has made their investments less value now. The development in Middle East has affected the re-export business in UAE as well.

                      The recent dispute between USA and Turkey led to the depreciation of the Turkish Lira by 38% in the past two weeks.

                      The new sanctions imposed by USA on certain Russian institutes also created some uncertainty and the value of the Ruble came down by about 14% during the last three weeks. The currency depreciation, political instability and reducing buying power have contributed to lower demand for Ceylon Tea at the Colombo tea auction.

                      According to the TEA chief prices of low grown leafy teas and tippy teas came down by a considerable margin at the last two auctions. “After almost two years, the average Colombo tea auction prices have gone below Rs. 600.00 per kg and the average price recorded last week was Rs. 525/ per kg . Many exporters have to collect their payments from Iran and unless an alternate payment method is not found Sri Lankan tea exporters may not be able to continue to serve the Iranian market that would adversely impact on tea auction prices,” Karunaratne said. According to TEA Sri Lanka achieved its highest tea production of 340 million kg in 2014 but since then the crop yield has declined due to inadequate replanting, adverse weather conditions, shortage of workers, ban on glyphosate and non- availability of accepted weedicide. The restriction in tea production limits the expansion of tea export volume. The excessive use of MCPA as an alternate weedicide resulted in having high MRL in most high grown and mid grown teas that prompted Japan to introduce strict regulations to monitor import of tea from Sri Lanka. The exporters are now required to get the samples of tea shipments for Japan tested in advance and get the clearance before shipment. This has resulted in incurring additional expenses for the exporters. Although the government has officially lifted the ban on glyphosate for use in tea and rubber sectors, the plantation companies are yet to receive the glyphosate weedicide. It is important to have glyphosate without further delay to address the MRL issue experienced with Ceylon tea shipments to Japan.

                      “It is necessary to find solutions to the prevailing payment problems with Iran and also resolve the other issues in respect of falling tea crops and MRL issue as the country cannot afford to lose her market share to the competitors as it will be difficult to regain it,” the TEA president said. National Chamber of Exporters President Ramal Jasinghe said Sri Lanka’s annual tea exports to Iran has dropped by around 10 percent over the year from its revenue of around US$ 380 million per annum. Garments account for around 70 percent of the country’s total exports to the US. Trade with Iran is slowing down following the sanctions.

                      ‘We will need to monitor the situation as we still do not see any ramifications to the European market. However, the issue will have to be handled with much thought diplomatically as it seems to be turning out into a major global trade crisis,” Jasinghe said.

                      Despite the delay to launch the National Export Strategy exporters hailed the move as vital to face tough times in global trade. However exporters said there has to be keen interest by both the public sector, the enabler and the private sector, the implementer to make use of the strategy to boost exports.

                      Sri Lanka’s export income for the first time surpassed import expenditure in May this year. “There has been a 10 percent month on month growth in export income this year and if the momentum could be maintained we could reach the US 417. 5 billion export income target by 2020,” Jasinghe said.

                      The US President’s war against China got a fresh boost last week bringing in a 25 percent tax on a second wave of goods worth $ 16 billion. The latest move ratchets up the battle which began in July. However, China has been following a tit for tat retaliatory stance against the US with taxes on the same value of US products.
                      Live Today........
                      Without compromising your ability to Live Tomorrow………

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