Sri Lanka’s tea auction market shows surprising resilience as strong buyer demand keeps prices steady despite Middle East tensions and global uncertainty.
Auction No. 10 that recently concluded became the second Sri Lanka tea auction to take place after rising geopolitical tensions in the Middle East. Despite speculation that the regional conflict could negatively affect demand and prices in the Colombo tea auction, the market displayed encouraging resilience. There was healthy and consistent buying interest across most categories, although the Tippy teas segment experienced a noticeable decline, with some lots even remaining unsold due to weak bidding.
The overall auction quantities declined further this week, with approximately 5.0 million kilogrammes offered to buyers. Within this volume, the Ex Estate category accounted for around 0.75 million kilogrammes, slightly lower than the 0.8 million kilogrammes recorded in the previous auction. This reduction reflected tightening supply in the Sri Lankan tea market, particularly among high quality plantation teas.
The Ex Estate catalogues displayed reduced availability of the highly sought Select Best seasonal Western teas. Nevertheless, the catalogue still featured a useful selection of teas sourced mainly from the Western highlands and the renowned Nuwara Eliya tea growing region. These regions continue to play a vital role in maintaining the reputation of premium Ceylon tea in global markets.
The Better Western BOP and BOPF grades remained firm in the Sri Lanka tea auction. Select invoices of BOP, BOPSp and PEK recorded price increases of up to Rs.50 per kilogramme. In the Below Best category, brighter BOP teas gained between Rs.20 and Rs.40 per kilogramme, although other varieties showed mixed performance across different invoices.
The corresponding BOPF grades in the higher price brackets generally sold at around the same levels as the previous week. Meanwhile, the rest of the BOPF category remained firm and in some cases appreciated by up to Rs.20 per kilogramme. At the lower end of the market, BOP prices were irregular, whereas the equivalent BOPF grades maintained firmness and also gained up to Rs.20 per kilogramme in selective instances.
Nuwara Eliya teas continued to perform reasonably well, with prices largely depending on quality. However, the Uda Pussellawa teas appeared weaker during this auction. In the Uva region category, the high priced BOP teas that had performed strongly last week declined by Rs.50 per kilogramme or more, although the rest of the teas from the region remained generally firm. The corresponding BOPF teas from Uva showed firmness with selective gains of up to Rs.20 per kilogramme.
High and Mid Grown CTC teas displayed no major change in overall price trends. Meanwhile, Low Grown BP1 teas remained generally firm. The PF1 category recorded stronger buying interest and experienced a firm to slightly higher price movement during the auction.
The Low Grown teas offered this week totalled approximately 2.1 million kilogrammes. Within this segment, the Leafy, Semi Leafy and Tippy categories attracted moderate buyer demand, although the Premium tea category saw relatively weaker interest from exporters and traders.
In the Leafy and Semi Leafy catalogues, Select Best and Best BOP1 teas managed to maintain their previous price levels. However, the remaining varieties along with the bolder grades experienced price declines in comparison to earlier auctions.
Well made OP1 teas held firm during the trading session. Meanwhile, the Below Best teas in this category recorded price appreciation, while the lower end teas sold roughly at levels similar to the previous week.
The OP and OPA categories overall maintained their price stability. Well made PEK teas also remained firm, although the Below Best PEK varieties declined slightly. Teas at the lower end of this category were sold at levels comparable to the last auction, while PEK1 teas in general recorded price increases.
In the Tippy catalogue, well made FBOP teas along with cleaner Below Best and neat bolder varieties held firm in the market. However, the remaining teas within this catalogue were slightly weaker. The FF1 teas showed mixed performance, generally moving between firm and easier levels, while teas at the bottom end of the catalogue declined.
Within the Premium catalogue, Tippy teas experienced a significant downturn. Many lots declined substantially in price and at times remained unsold due to the absence of suitable bids from buyers in the Colombo tea auction market.
