Dimbula season down on Kenyan surplus
View(s):Sri Lanka has hit a low this Dimbula season with the world market more interested in low priced surplus teas from Kenya as opposed to Ceylon Tea.
Brokers point out that Japanese buying during this Dimbula season, a high period usually for Sri Lankan stocks, has been relatively “careful and selective.”
“The level of price achieved is not as high as expected since the demand is not as great,” brokers said adding that it was a sign of a slow recovery inspite of gains in the rupee. Surplus tea from Kenya had lowered their prices as a result even Wednesday’s prices at the Colombo auctions were weaker, down by about Rs.20-40.
Another reason attributed to the lower prices is due to the poor quality of leaf compared to the previous week as a result the depth of demand this year is lower than last year, it was noted. The inconsistent weather pattern has created a setback to planters as the cooler climate expected was not noticeable.
Hayleys Plantations Managing Director Roshan Rajadurai told the Business Times that in addition to losing out on the Japanese market some of the other markets were also following the standards set out by Japan. He noted that now all the other countries were making reference to the Japanese standard due to the high residue levels found in teas exported from Sri Lanka.
In the absence of glyphosate use on the plantations during the past few years there has been a growing use of a number of other banned products to combat weeds on the estates. As a result a number of the plantations have been subject to issues by Japan that has set high standards in the purchase of teas.
In this context Sri Lanka Tea Board Chairman Lucille Wijewardena said that they were likely to get back to exporting Ceylon Tea to Japan. He noted that since glyphosate is back in use on the plantations they were likely to resume their previous export orders. Mr. Wijewardena pointed out that they were currently in contact with the Japanese authorities on the research information.
“They want us to do testing in the laboratory and field testing through the TRI (Tea Research Institute),” he said adding that it was currently in progress.(SD)