Market Report – Week 38

Market Report – Week 38 (20 September 2024)

Below is a summary of global tea market activity and insights for Week 38.

African Markets

Kenya – Good Demand

• Mombasa Auction:

  • Offerings & Prices: 300k packages on offer, with the average hammer price rising 5 USC to USD 2.09/kg. Absorption reduced, leaving 57% unsold.

  • Grade Trends:

    • Flavoury KTDA EoR BP1s saw strong demand, especially from Kazakh and CIS buyers. Pakistan packers and Yemen provided additional support.

    • KTDA WoR BP1s experienced reduced demand at reserve prices.

    • Medium and plainer BP1s traded firm to dearer.

    • EoR PF1s opened strong, traded dearer, but softened towards the close. WoR PF1s traded at reserve prices with poor invoices neglected.

  • Weather & Crop: Seasonal rainfall and sunny spells continued. Production levels remained steady.

Malawi – Less Demand

• Limbe Auction:

  • Market Activity: 2,540 packages on offer; only BP1s sold at dearer rates. All other grades were neglected.

  • Weather & Crop: Seasonal crop intake is rising. Weather conditions are typical, with warm days and cool nights. Rainfall forecasts predict normal to above-normal rains.

Other African Regions

• Uganda & Rwanda:

  • Ugandan teas remained steady to firm, while Rwandan teas experienced upward price trends due to improved liquor quality.

  • Tanzania and Burundi offered stable volumes, though much of it sold at firm to steady levels.

Asian Markets

Sri Lanka – Improved Demand

• Colombo Auction:

  • Offerings & Trends: 4.026 million kgs of tea offered. Lower volumes drove stronger demand, with mixed pricing trends across grades.

  • Grade Highlights:

    • Ex-Estate: BOPs declined by USC 5-10, while BOPFs gained USC 3-10. Nuwara Eliya BOP/BOPFs eased by USC 10, while Uva BOP/BOPFs increased by USC 10.

    • CTC Teas: Low-grown PF1s gained USC 10-15, while BP1s decreased by USC 10. High-grown and medium-grown PF1s rose by USC 10.

    • Leafy Teas: OP1s gained USC 20; FBOPs and FF1s showed steady to dearer trends.

    • Off Grades & Dusts: Mixed performance with better grades showing gains.

India – Strong Demand

• North & South India:

  • Strong buying was observed for Orthodox teas (export-driven) and CTC teas (domestic consumption). CTC dusts performed well due to regional festivals.

  • Annual production is expected to fall by 12-15% due to adverse weather conditions.

Indonesia – Slower Demand

• Jakarta Auction:

  • 8,580 packages on offer; 38% unsold. Sumatra Orthodox teas traded steady to easier.

  • External Factors: Minor damage reported from a 5.0-magnitude earthquake near tea plantations.

Vietnam – Limited Plucking

• Production & Challenges:

  • Heavy rains and flooding post-Typhoon Yagi have limited plucking and disrupted production. Factories rely on existing stocks while restoring fields.

Global Outlook

• Demand Patterns: Strong demand in Sri Lanka and parts of India contrasts with slower activity in Malawi and Indonesia. Kenya remains a robust contributor to global supply.

• Weather Impact: Favorable rainfall in most regions is supporting production, but erratic patterns in Vietnam and Sri Lanka may disrupt short-term supply.

• Shipping & Logistics: Container shortages and longer transit times are affecting exports, particularly from East Africa.

Despite mixed demand and weather challenges, robust markets for high-quality teas and reduced production in key areas are likely to support stable to firmer pricing trends globally.