Weekly market report - week 14/2016
Week 14, 2016
Tea market report 4-8 April 2016
The publication of a very good crop figure one day before the Mombasa auction gave the market immediately the possibility to respond. It did and made the auction trade mostly 5-15cts easier. A 43% higher crop for Jan-Feb 2016 compared to 2015 combined with the widespread rains which started last weekend, there isn’t much to be bullish about. The current prices of Kenya teas seem to be good value and will attract demand. Despite Kenya teas being good value, a 17% came out in this week’s auction, which has been lower in the past months.
There wasn’t an auction in Malawi last week, resulting in a large auction this week. Only 25% was sold in the room at mostly easier rates. The season is slowly heading towards the close, but it is still fairly nice weather for this time of the year. There are still good rains but pruning has started on many estates, which indicates that green leaf intake will decline soon.
In Colombo nothing changed compared to the last weeks. Demand remains strong on the back of the limited supply of tea. It is still dry in Sri Lanka but some areas reported evening showers. These showers could be an indication of pre-monsoon showers which normally start in April. The Jakarta auction experienced good demand this week, with only 2% remaining unsold and resulting in a generally firm market. The weather is slightly changing at Java with bright and sunny mornings and showers during the evening. Auction quantities remain between 15-30% higher than last year which indicates that currently supply keeps up with demand. But with the changing weather, firm demand and lower prices than 4-8 weeks ago, there isn’t much downwards potential left. In the North of India the auctions have started again with new season teas. It is expected the supply will improve in the coming weeks. In the South of India, the weather remains dry and crop intake is decreasing. The limited supply and decent demand made the South Indian auctions trade firm to dearer.
The first spring plucking round have taken place in Vietnam. It will take a few weeks before the next plucking round will take place. The current availability of tea remains limited. Argentina is slowly heading towards the end of the season. The warehouses are full of teas, which are mostly sold. But there is still tea available for the buyers who still need to cover quantities.
Again no bullish news from East Africa, a declining availability in Central Africa, a starting season in North India and Vietnam, continuing limited supply in South India and Sri Lanka, slightly changing weather in Indonesia and sufficient quantities available in Argentina. Although there are origins from where the supply of tea is limited, there is plenty of tea to compensate from other areas.
“Life is really simple, but we insist on making it complicated.” – Confucius
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