Tea market most affected by Russian crisis

Inspite of the continued lack of activity for Russia in particular and the CIS in general, the comparatively small weight of 4.9 million kgs. met with reasonable demand particularly for the better teas. Consequently, the sharp drop in prices that was witnessed virtually across the board last week with the poorer teas declining substantially was not repeated at this weekÕs auction. In fact, the overall market was reasonably steady other than for a range of Low Growns and some of the poorer Off-grades and Secondary Dusts.

Therefore, if not for the Russian crisis we probably would have had quite a strong market.

Sale quantities move up to 5.6 million kgs next week and 5.9 million kgs. Thereafter with a further increase in auction quantities in October and November following the traditional cropping pattern. What is of concern is whether there would be sufficient demand with the absence of Russia and the CIS to support these larger auctions without a further erosion in prices. In our view the good teas should continue to sell well and it is the poorer teas that may be difficult of sale. In this respect "The Special Comment" set out below becomes relevant particularly in the current market scenario.

The political and economic crisis in Russia continues with the Rouble quoted at 20 to 22 to one US dollar. We hope that some political stability will be established soon so that the economic aspects will then receive the important attention it requires.

Special Comment
The Russian crisis has undoubtedly had a major impact on the Sri Lankan tea market. It is however not the first time that our Tea industry has had a crisis nor will it be the last. Every crisis creates with it opportunities. Therefore, whilst accepting that we have a crisis and endeavouring to deal with the short term issues with the support of governmental authorities, we should also draw confidence from the fact that we are the world's largest tea exporter with Colombo the single largest Tea Auction Centre and no one market however big can create a total destabilisation of Sri Lanka's Tea Industry.

Consequently, in this short commentary we would like to highlight the importance of manufacturing a quality product which in our view is never in an over supply situation and would always find a ready market as has been displayed even over the past two weeks of depressed marketing conditions. In this respect we summarise the type of teas that should be ideally produced for the different categories.

1. Low Growns should be true to grade and not be ragged with too much stalk and fibre.

2. Western High Growns should have a good leaf appearance and strong liquors with quality.

3. Light liquoring High Growns such as Nuwara Eliya must have a good leaf appearance and brightness in the liquors should not be confused with greenish teas.

4. Other High and Mid Growns including Uvas should aim at good alround teas as regards both leaf and liquors.

5. CTC teas should have a blackish and clean leaf appearance with thick coloury liquors with some brightness.

The prerequisite for producing any of the above categories of teas is a good standard of green leaf. This aspect should therefore be of prime importance to all estates and factories particularly at this juncture.

Agro-Marine Group marks 25 years in exports

The Agro-Marine Group, comprising Agro-Marine Limited (a company engaged in processing seafood for export), Aqua-Gardens (Pvt.) Limited (a company engaged in aquaculture) and Aqua-Packaging (Pvt) Limited (a company manufacturing polybags, exclusively for export) celebrated its 25th Anniversary recently.

The seafood industry in Sri Lanka commenced in the early seventies under severe financial constraints. The time when Ken Nirmalan, presently the Executive Chairman and Chief Executive Officer of Agro-Marine Limited stepped into the scene. Prawn farming was unheard of then, and although the rich waters of the north and east were teeming with bountiful harvests, competition was high amongst existing exporters, many entering the scene to benefit from incentives offered by the Government in return for their foreign exchange earnings.

Mr. Nobuyuki Tamba, President, Coral Sea Co. Limited, Japan, in one of his speculative buying visits to Colombo, struck up a close relationship with Agro-Marine Limited. A relationship that continues today, lasting 25 years.

In 1983, Agro-marine Limited was awarded the prestigious Presidential Export Award for seafood - a proud achievement.

Agro-Marine entered a new activity in 1987 - polybag exports. Aqua-Packaging (Pvt.) Limited has grown in stature over the years producing high quality custom-made polybags for export to clients in the USA and European countries. Their present capacity is 400 m/t per month and is expected to increase by 30% with their planned expansion later this year.

The celebrations commenced with an Awards Ceremony held at the Sri Lanka Exhibition & Convention Centre on Saturday, 15th August 1998.

The Central Bank's Spot Rates for transactions with Commercial Banks announced on the morning of September 15, 1998 were as follows:

The approximate middle exchange rates of following currencies calculated on the basis of cross rates quoted by Gulf International Bank, Bahrain as it appeared in Reuters Financial Information System on September 15, 1998 were as follows:

Average rates at which the following currencies were quoted by Commercial Banks in Colombo for Telegraphic Transfers at mid-day on September 15, 1998 were as follows:

Average Weighted Prime Lending Rate (AWRP) and Lowest Prime Rate (LPR)
The Average Weighted Prime Lending Rate (AWPR) during the week ended September 11th, 1998 was 15.1 per cent for all banks. The Lowest Prime Rate among banks during this week was 13.8 per cent.

Average Weighted Deposit Rate of Commercial Banks (AWDR)
The Average Weighted Deposit Rate (AWDR) of Commercial Banks for the month ended August 31st, 1998 was 9.6 percent.