- Auction duration reduces; increase in unsold teas
- The first-ever e-Auction held on April 4
The Colombo Tea Auction cleared 5.2 million kilograms of tea at the third e-auction concluded last Friday, despite an increase in unsold teas.
“Overall auction quantities totalled 5.2 M/Kgs comprising of 9,500 lots of tea. Consequent to the advancement/refinements made to the e-platform, the auction duration was reduced although the percentage of unsold teas has shown an increase, which perhaps is resulting from the limited time availability for the conclusion of bidding per lot,” Forbes and Walker Tea Brokers said.
The ex-estate offerings totalled to 0.7 M/Kgs with overall quality being reasonably maintained.
“There was fair demand although at slightly easier levels. The select best BOP/BOPF’s were often easier following quality, whilst prices for teas in the other categories tend to fluctuate due to the increased availability combined with the demand factor based on the urgency of shipments,” Forbes and Walker noted.Low-Grown teas have been able to maintain the momentum gained in last two auctions, although a slightly easier tendency was recorded, particularly for the poorer teas.
The first-ever e-auction was held on April 4 with the Colombo Tea Traders Association and the Colombo Tea Brokers Association in partnership with technology platform provider CICRA Solutions.
March exports down
Meanwhile, Sri Lanka’s tea export volumes in March fell to the lowest monthly volume since in April 2009.
In March, the country exported only 13.8 M/kgs of teas recording a decrease of 47.7 percent YoY or 12.6 M/kgs.
“This is mainly due to the disruption to work during the latter half of the month on account of the COVID-19 pandemic,” Forbes and Walker reasoned.
Further, drought has also impacted the tea output significantly. The Regional Plantation Companies (RPCs) have experienced nearly 40 percent drop in their output due to the drought.
However, with showers returning, the industry expects that the output will recover by May
this year. Similarly, the revenue too declined by Rs. 10.9 billion in the month compared with March 2019.
The cumulative tea exports also declined by 14.1 M/kgs to 59.5 M/kgs during the first three months of the year compared to the corresponding period of last year. “The main categories of exports on a cumulative basis too show a decrease compared to the corresponding period of 2019.
“Meanwhile, total revenue of Rs.49.2 billion for January-March 2020 shows a deficit of Rs.13.2 billion vis-à-vis Rs.62.4 billion of January-March 2019, resulting in the FOB value for the period January-March 2020 of Rs.826.39 declining Rs.21.18 from Rs.847.57 of January-March 2019,” Forbes and Walker elaborated.
Iraq has secured the top position followed by Turkey and Russia and Iran, whilst Azerbaijan, Chile, Saudi Arabia, China and Syria are the other noteworthy importers during the period
under review. During the period, Ukraine has shown a growth in imports; however, Jordan, UAE and Germany have shown decreases in imports compared to the corresponding period of 2019.