Tea industry is very sensitive for external forces, specially weather. Dont think that there would be any big loss of demand for Tea and Rubber. Rubber demand increased mainly due to the fact that over whelming demand from boobing economies like India,China,Brazil, Russia,specially India and China. India n China are in race of making vehicles specially for low budget customers in Asia, Nano is a good example.
According to a latest report, Indian Rubber consumption has been increased by a 6%, recently. So this might be the same or more with China.
The middle east never has been stable, some thing is there to talk about every day. Now the problems have been confined to Libya and Syria. The up rising started in Tunisia and spread across the region and now some what settled. The chaos in Libya would have an effect on crude oil production, the oil prices might go up as already has happened. The increasing Oil price intern make the synthetic rubber price go up, opening up new mkt for the natural rubber,so the middle east crisis has a favorable effect for rubber.
Most of SL tea is exported to the CIS countries, as i can remember, including Russia. Russian economy is doing well. Japan is a another mkt, dont know how its economic downturn gonna effect on tea.
According to the Tea boards recent figures, there is a rise in export of tea. April-KG-19,183,68, May-KG-23,715,590, June-KG-28,756,361.00. These figures show an increase in exports,even at the worse part of that Middle east up rising.
Wage hike had no effect for the last quarter ended in June. I dont think the government or trade unions wants to c the collapse of the plantation industry. When companies making huge profits, a portion of it should be draining to the most important part of the tea industry, the plucker,.as well. This wage hike came after 5y, as i can remember. Companies should be flexible, they should be able to find ways and means to keep their growth momentum, as they did in most difficult times than this.
After all this seems to be a downward rally than anything else.Ppl tend to go after rallies rather than fact finding and realizing,brokers also backup them. we will be able to c the real impact of this wage hike in next quarter results.
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