Colombo Tea Auction prices remain stable despite conflict between Russia and Ukraine

‘A degree of uncertainty and volatility in the future would no doubt be a concern’

Amidst the ongoing conflict between Russia and Ukraine, and the sanctions imposed on Russian banks, the Colombo Tea Auction prices largely remain unchanged, according to Forbes & Walker Tea Brokers.

“Perhaps a degree of uncertainty and volatility in the future would no doubt be a concern for the Sri Lankan tea sector considering the ‘Ceylon Tea’ presence in both these markets. Undoubtedly trading conditions are likely to be strained and additional war risk surcharges would further escalate the high logistics rates, which have already adversely impacted on tea prices,” they said.

Forbes & Walker Tea Brokers further said, “Total Auction offerings declined sharply and totalled 4.98 M/Kgs from the 6.0 M/Kgs on offer the previous week. Ex-Estate offerings comprised of 0.81 M/Kgs, down from a 0.98 M/Kgs the previous week.

Overall quality of teas from the Western planting districts showed a decline with fewer seasonal teas on offer. Consequently, prices for the better Westerns’ declined by Rs. 20-30 per kg and more with the exception of the few available seasonal teas which continued to sell in keeping with quality. In the Below Best category, BOP/BOPF’s declined Rs. 20-40 per kg and Rs. 20 per kg respectively. Plainer BOP’s declined Rs. 10-20 per kg, whilst the corresponding BOPF’s sold around last week’s levels. Nuwara Eliyas’ – the limited availability of BOP/BOPF invoices sold around last week’s levels, whilst the Uva/Uda Pussellawa prices mostly remain unchanged.

High and Medium Grown CTC teas continued to witness a bearish sentiment, whilst the Low Growns which have been selling at premium levels for a period of time declined fairly sharply by Rs. 30-60 per kg.

Low Growns comprised of 1.9 M/Kgs in the Leafy/Semi Leafy and Tippy catalogues. There was fair demand.

In the Leafy and Semi Leafy catalogues, Select Best BOP1/OP1’s together with clean Below Best varieties maintained, whilst the others were barely steady. Well-made OP/OPA’s were firm to marginally easier following quality, whilst the others in the Below Best category and poorer sorts were barely steady. A range of well-made PEK/ PEK1’s were fully firm to selectively dearer, while the others and poorer sorts maintained.

In the Tippy catalogues, select Best FBOP/ FF1’s were firm to marginally easier, whilst the Best together with cleaner Below Best sold around last levels. Balance declined following quality.

In the Premium catalogues, Very Tippy teas continued to attract good demand. Best together with cleaner Below Best were firm, whilst the balance were irregular following quality.

National tea sales average for the month of February 2022 recorded Rs. 725.63 (USD 3.61), thus establishing the highest ever recorded average for a calendar month surpassing the previous best of Rs. 704.67 (USD 3.56) recorded in the month of January 2022. In comparison to the February 2021 average of Rs. 645.95 (USD 3.35), shows a significant increase of Rs. 79.68 YOY.

When analysing the respective elevational averages for the month of February 2022 – Highest ever High Grown average for the month of February of Rs. 696.48 (USD 3.47) recorded an increase of Rs. 15.92 month on month vis-à-vis Rs. 680.56 (USD 3.39) of January 2022. When compared to the February 2021 average of Rs. 611.83 (USD 3.17), a significant increase of Rs. 84.65 is recorded YOY.

Highest ever Medium Grown average for a calendar month totalling Rs. 645.08 (USD 3.21) for February 2022 recorded an increase of Rs. 18.35 month on month vis-à-vis the previous highest of Rs. 626.73 (USD 3.12) of January 2022. When compared to February 2021 average of Rs. 579.78 (USD3.01), shows a significant increase of Rs. 65.30 YOY.

Low Growns too recorded the Highest ever average of Rs. 759.45 (USD 3.78) in February 2022 surpassing the previous best of Rs. 744.52 (USD 4.01) recorded in May 2020. It records an increase of Rs. 25.76 month on month and Rs. 85.34 YOY respectively.