Information from the Asia Siyaka (AS )Weekly Tea market Report showed that globally most Tea producing countries showed deficit production results during the first six months of this year; in India production was down 24.16 percent, in Kenya, 21.21 percent , Uganda 8.86 percent. Tea production in Sri Lanka was down 6.39 percent.
Although Russia, /CIS countries continued to be our main Tea export destination, the future looks bleak for Tea exports because as earlier reported in these pages, Russian buying came down 1.5 percent.
‘New markets have not been formerly explored. However there are few private Tea factory owners who have opened markets in the US, which is forming up as a niche market ,’ said a Tea factory owner who owns and runs four Tea factories in the Ratnapura District. He said he had no problem exploring markets in the US who were quite prepared to buy ex garden and sell such Teas branded accordingly. Potential for such sales are substantial ,said another Private Estate owner. He said he was negotiating for sales to the Netherlands and other EU destinations as well.
The formal Tea sector, were not that enthusiastic to sell ex garden direct to foreign buyers. They said the auction system was the best sales method that evolved over the past many years. They were not quite in favour that the auction system be replaced.
Last year to end June, Russian exports accounted for 38.9 million kilos. This year the demand dropped to 36.3 million kilos. Similarly Japan, the UAE, and Germany to some extent were all deficit markets. Conversely Iran, Syria, and Iraq had increased their imports.
Despite verbal hype that Pakistan would be a major Ceylon Tea consumer, they were glaringly absent from the AS list of consuming countries.
The John Keels Tea Market report ( JKH) said weather conditions had influenced crop intakes this year. Not least that with the onset of the Uva drought, low production contributed to a compounded retrograde situation. This could only be recouped to some extent if the North East Monsoon would arrive on schedule.
Following expected Uva quality, Uda Pussellawas recorded a healthy variance of about Rs. 15. Per kilo some Uva marks were on demand at Rs. 850. per kilo, said the JKH report.
But buoyancy that was the feature the previous week was absent at last weeks auction.
Most Brokers were mum on the import of Tea. All they said was ‘Nothing has been decided. Discussions are still going on.’
The Tea Board, however, as reported by us last week, continued to approve import of Darjeelings and Assams. ‘No we do not approve imports of off grade teas.’