Market Report 8 – 12 July 2024

CTC Segment Overview:

• Mombasa Auction: Fair demand was observed for the 300,000 packages on offer, up from 275,000 last week. The average hammer price increased by 5 cents to USD 2.09/kg, though absorption decreased, with 57% remaining unsold. Flavory KTDA EoR BP1s saw improved demand at dearer rates, particularly from Kazak buyers, with support from Pakistan packers and CIS. KTDA WoR BP1s faced reduced demand at reserve prices. Medium BP1s met steady demand at firm to slightly dearer rates, while plainer types saw improved demand at firm to dearer rates.

• PF1s: KTDA EoR PF1s opened firm, traded dearer, but weakened towards the close, with Pakistan packers, bazaar, and Afghan traders active. KTDA WoR PF1s traded at reserve prices, with many lots taken out, and reprints and poor invoices were neglected. Medium PF1s experienced irregular demand, trading at firm to dearer rates, while plainer types followed a similar trend.

• Dusts: KTDA EoR PD/D1 traded slightly dearer, WoR PD/D1 remained firm, and medium PD/D1 traded dearer. Plainer types met improved demand at dearer rates.

• Weather & Supply: Weather conditions were typical for the season, with regular rainfall and increasing temperatures. Crop levels remained consistent. Abundant tea continues to circulate through the auction, with a new M4 auction set to be introduced for teas reprinted two or more times. Shipments from Mombasa are slowing down due to shipping lines prioritizing more lucrative routes from the Far East.

• Other Markets: Limbe auction saw less demand, with only 39% of teas sold. Kolkata's CTC segment met good demand, though well-made Assam teas traded lower, and mediums and Dooars traded sideways. Guwahati auction also saw good demand, but well-made Assams traded irregularly easier, with mediums easing up to 10 cents.

Orthodox Segment Overview:

• Colombo Auction: The auction offered 5.58 million kgs, up from 5.01 million kgs last week. Demand was lower across the board. Better BOPs remained firm, while lower grades eased by 10-15 cents. Best BOPFs declined by 10 cents, and lower grades eased by 4-8 cents. Nuwara Eliya BOPs were not on offer, and BOPFs remained unsold. Uva BOP/BOPFs maintained last week's levels.

• Other Grades: Better OP1s declined by 15 cents, while others eased by 10 cents. BOP1s remained firm, and better FBOPs held steady, with bottom-end teas maintaining prices. Better FF1s were firm, while others shed 10 cents. Better OP/OPAs declined by 10-15 cents, with others easing by 10-20 cents. PEK1s gained 20-30 cents, and PEKs increased by 10-20 cents. FFs gained 20 cents, while FGS1s, FNGs, and BMs showed mixed trends. High-grown dusts remained firm, while low-grown dusts gained 4-8 cents.

• Weather & Crop: Dull weather with intermittent showers was reported across all planting districts. Western, Uva, and Udapussellawa regions saw increased crop intake, while Low Grown regions declined. The weather forecast predicts considerable rain on the eastern slopes, which could affect Uva seasonal tea production. Erratic weather patterns have already made it challenging for Uva estates to produce seasonal teas.

• Global Impact: Assam faced extreme weather, including excessive heat and ongoing flooding, leading to a 30% drop in May tea production, the lowest in a decade. This could hinder transport and further impact production. Sri Lanka also experienced lower-than-usual production in May and June, with recent rainfall suggesting healthy August offerings, though estate worker protests could affect output. Given the current crop situations in India and Sri Lanka, a robust market is anticipated in the mid-term.

• Jakarta Auction: Strong demand was seen for the 6,380 packages on offer, with only 1% remaining unsold. Orthodox Java/Sumatra teas sold at firm to dearer levels. Daily moderate to heavy rainfall was reported across Java, with hot, sunny weather and light rain in Sumatra.

This report provides a comprehensive overview of the tea market, highlighting key trends in demand, pricing, and weather conditions affecting production and sales in major tea auctions.