- An e-platform currently being developed to allow buyers to bid for teas remotely
- Colombo Tea Auction likely to be held this Friday
By Nishel Fernando
The Colombo Tea Auction, the world’s oldest operational and largest single-origin tea auction, plans to conduct its next auction for the first time on an e-platform, aiming to avoid public gathering, to slow the spread of the coronavirus (COVID-19) in the country.
“We are trying to change the way of conducting the auction. From the traditional outcry system, we are changing it to an e-platform, without getting people together physically. The platform is being currently developed; we hope it will be ready by this Thursday, so we could finish the auction this week,” Colombo Tea Traders Association (CTTA) Chairman Jayantha Karunaratne told Mirror Business yesterday.
He noted that the e-platform, which is currently being developed, would enable the buyers to bid for teas remotely from their respective offices, although the specifics of the platform are yet to be revealed.
The Regional Plantation Companies (RPCs) earlier feared that the buyers might not turn up to the tea auction due to the COVID-19 fears, leaving much of tea stocks unsold.
The Colombo Tea Auction is now likely to be held this Friday.
The RPCs, with a special permission granted by the government authorities, have already transported their teas to warehouses for the upcoming auction.
Meanwhile, it’s reported that both RPCs and smallholders are seeing substantially lower tea outputs due to the prevailing drought in the key tea growing regions, in particular the western region. “The drought is unprecedented this year – that means we will get 30 percent of the usual crop in the coming months,” Hayleys Plantations Managing Director and the Planters’ Association (PA) of Ceylon past President Dr. Roshan Rajadurai said.
He noted that the current drought is the worst he has seen in the past 35 years, while the showers are yet to be seen in the hill country.
“We should have scattered showers from last week of March. However, the heat is getting more intense than getting any rain,” he added.
The drought alone with adverse impacts of the COVID-19 pandemic, which has disrupted the value chains and logistic channels, has worsened the prospects for Ceylon Tea this year.
Dr. Rajadurai feared the potential scenario leading to unsold teas at the Colombo Tea Auction, which could adversely impact the cash flows of RPCs. “It’s going to be a difficult time. If we are not able to sell tea and receive money, we are not going to be able to sustain,” he said.
According to sources, several buyers have cancelled the previously placed orders.
However, Asia Siyaka Commodities PLC MD/CEO Anil Cooke opined that the demand would rebound for Ceylon tea in medium to long term, although there could be some adverse impact in the immediate term.“In the immediate short term, there could be problems but we are optimistic in medium to long term – there will be a good demand for tea.
Even overseas, most of the shelves are cleared of stocks. At some point, importing countries will keep asking for teas. They are already beginning to ask for tea now. Therefore, we are optimistic of the future,” he elaborated.
Cooke also noted that the prevailing issues with regard to shipping tea consignments are gradually being sorted out.
Sri Lanka tea exports increased slightly by 3.8 percent year-on-year to 292.6 million kilos in 2019, bringing an export revenue of Rs.240.6 billion, compared to Rs.231.7 billion in 2018. However, the analysts expect a much lower output this year, due to the prevailing condition.