Sector - Plantation

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Contra
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Tea stocks are the best contrarian play in the market right now!

Postby Contra » Thu Aug 27, 2015 11:12 am

I consider tea stocks as another contrarian buy. They are one of the cheapest stocks available in the market right now. In addition, there could be demand for defensive stocks such as for food and beverages stocks in the later stages of current major uptrend.

Currently western high grown tea is holding above the psychological tea average prices of Rs.400. In the recent past Average tea prices dropped below the Rs.380 as well. The biggest losers are low grown tea producers. In good time they were trading above Rs.500 beating high grown tea.

Now it is other way. There is some demand for quality UVA tea. There is also some support for high grown tea in tea auction. Is it beginning of sliver lining for high grown tea?

There are some reports that domestic tea rates in Pakistan have risen by Rs60-125 per kg in the wake of increase in Kenya's prices on the world market.

Will Pakistan buyers enter Colombo tea auction due to increased tea prices in Kenya?

Both Sri-Lanka and Kenya are having tea deficit due to fall in their tea output in the first half of 2015. Up to May 2015 Indian tea output was good. According to the latest reports Indian tea output in June 2015 fell by more than 14%. Sri Lanka’s Tea production for the month of July 2015 also has gone down by 10.76 % when compared with the same period of 2014.

Lower output in major tea producers could lead to higher tea prices. If we see further fall in carry out tea inventories we can expect good period for tea industry toward end of this year and in 2016.

Lower raw material prices and lower oil and other energy prices too will benefit plantation sector in the coming months. Any rupee depreciation against USD also will benefit tea producers. However I don’t expect much depreciation in rupee as it already devaluated against USD and as a results of it, rupee shot up from Rs.110 to Rs.136 at that time. Now it is trading around Rs.134 against USD.


Short term issues

Wage issues
Trading tea prices below the cost of production for most varieties except for world best quality Sri-Lankan Tea (Ceylon tea)


Long term trend

Becoming popular as a healthy drink
Demand from new markets especially in the North America (Remember Starbucks want to do tea business means there should be some strong prospects for Tea)
Higher demand from Asia pacific region due to increased population in the coming year
s

Some tea companies having high grown high quality world renowned Western tea

TPL
UDPL

BOPL
MASK

Some tea companies having low grown quality tea
[/u]

HOPL
AGAL
ELPL

Some companies having exposure to world renowned UVA tea

[i]MADU
NAMU
Last edited by Contra on Sat Aug 20, 2016 7:02 am, edited 4 times in total.
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Re: Tea stocks are the best contrarian play in the market right now!

Postby SHARK » Thu Aug 27, 2015 1:38 pm

I like TPL and ELPL from the List :ugeek:
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Re: Tea stocks are the best contrarian play in the market right now!

Postby KIM » Thu Aug 27, 2015 5:14 pm

Sri Lankan tea prices fell again at the Colombo auctions this week with demand slackening from the main markets of Russia and the Middle East owing to currency and petroleum problems, brokers said.

Lower quality teas harvested during a labour union ‘go-slow’ in July fetched lower prices but those from estates in the Uva highland region producing seasonal quality teas fetched good prices.

Tea prices at the Colombo auctions are still well below last year's levels in both rupee and US dollar terms.

“There was less demand this week and prices were often lower to last,” Forbes & Walker Tea Brokers said.

“The weak market sentiment is possibly emanating due to the decline in oil prices and the weakening of the Russian rouble which would no doubt adversely impact on the trading conditions in the Commonwealth of Independent States and the Middle East.”

Brokers John Keells Ltd. said the Russian rouble dropped to its lowest point this year as stock markets nosedived over concerns about the Chinese economy.

“The rouble tumbled to 70.92 against the US dollar, its weakest since December 2014. The plunge in oil prices and sanctions over the key tea consuming countries have highlighted how volatile the tea market remains.”

Although a handful of ‘leafy’ teas fetched record prices owing to special interest, most teas from highland estates met with less demand with the plainer invoices remaining unsold. (Colombo/August 27 2015)

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Re: Tea stocks are the best contrarian play in the market right now!

Postby Contra » Fri Sep 11, 2015 12:32 pm

http://www.economynext.com/Sri_Lanka_s_ ... 930-9.html

Sri Lanka's Bogawantalawa Tea gets into green and organic tea production

ECONOMYNEXT – Sri Lanka’s Bogawantalawa Tea Estates says it is diversifying into production of green tea and organic tea to capitalise on changing consumer tastes.

D.J Ambani, the firm’s chairman, said the company has been able to establish its own green tea production facility at Norwood Estate in the central hills under its strategy to diversify the types of tea being produced.

“The company has also obtained organic certification for its Rockwood estate enabling the Norwood production centers to produce both organic green and black teas to meet increased market demand for such premium Ceylon tea products.”

The company has expanded its organic tea cultivation area to cover Osborne estate as well.

Bogawantalawa Tea Estates has “plans to convert more tea lands for organic production at other tea factories situated in Bogawantalawa,” Ambani told shareholders in the firm’s annual report.

The Bogawantalawa Valley is well known for the flavour of its black tea.

The accounts showed the company has borrowed 30 million rupees to set up the green tea factory at Norwood estate.
(Colombo/September 12 2015
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Re: Tea stocks are the best contrarian play in the market right now!

Postby Contra » Thu Sep 24, 2015 3:27 pm

Western high grown tea is trading around Rs.400 and above. On the other hand other variety of tea such as low grown tea is trading below Rs.400. Low grown tea traded above Rs.500 as well in the past. Companies’ exposure to high grown tea especially western tea stocks should out performs others. Strong dollar is another bonus for tea stocks. Keep an eye on tea stocks more exposure to Europe, the USA and China. During last two months western tea average prices have fetched above the tea average prices which reported during the period from April to June 2015.Will this trend continue? Why they are getting premium to other tea varieties such as low grown tea? Is It due to demand from the high quality customers from USA, Europe, Japan and China for high quality high grown tea and western tea?

September western high grown averages

09/09/15: Rs.390.67

17/09/15: Rs.417.94

Cores.2014: Rs.399.85

Western High grown tea averages from April 2015 to August 2015 in rupees.

April:381.42
May:373.74
June:374.46
July: 405.53
August:399.93
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Re: Tea stocks are the best contrarian play in the market right now!

Postby Contra » Sun Sep 27, 2015 2:14 pm

Those tea companies more exposure to Europe, The USA, Japan and China will outperform others in the tea group in the coming years. In dollar terms also they will benefit more. It is time to identify tea companies more exposure to above countries. They will get premium prices for high quality tea. There will be great demand for high quality tea coming from hills and valleys free from pollution in the coming years. After long period, price wise western grown tea is outperforming other tea varieties in tea auctions.
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Re: Tea stocks are the best contrarian play in the market right now!

Postby Keri » Thu Oct 08, 2015 4:22 pm


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Re: Tea stocks are the best contrarian play in the market right now!

Postby Contra » Fri Oct 09, 2015 10:30 am

Keri wrote:Dear Contra,

Any views on this news

http://www.economynext.com/Sri_Lanka_te ... 193-9.html


In the short run, there will be some affects on earnings of plantation companies .We are seeing drop in tea prices due to some short term issues. Some of those issues are not permanent issues. Now there is some silver lining due to coming Iran factor. We cannot make capital gain by over night from tea stocks. As I am a contrarian, I would like to keep some tea stocks in my portfolio. We have to find out best growth stocks having some great value in the plantation group now. For that we have to do some serious study. Remember any industry can have turnaround suddenly. Currently western tea high grown is outperforming other tea varieties.

Main feature of the recently concluded tea auction (SALE NO: 39 – 06TH/07TH OCTOBER 2015):

The Best Western High Grown BOPs were mostly firm. The Best Western High Grown BOPFs gained quite sharply as the sale progressed.

We are seeing shift in demand for tea in tea auctions now. Average western high grown tea is fetching higher prices than low grown tea averages now. They are fetching premium average prices over other tea varieties and maintaining average tea prices over Rs.400 per one kg of tea. Western high grown tea has fetched Rs.410.12, Rs.421.20 in auctions dated 23/09, 30/09 respectively.

We should monitor demand for different type of quality tea in the coming years to get better decisions. We have to identify best among lot.

Which companies will have more growth?
Which companies will have increased market share?
Which companies have more export in countries such as to Europe, Japan, China and North America now?
Which companies have more value?
Which types of high quality tea will have premium prices in the coming years?
What is the reason for lower tea prices in Sri-Lanka when compare with Kenyan tea prices? This is kind of short term trend to me.
Which companies will have more earnings or marginal losses when compare with other companies in the group?



Last edited by Contra on Fri Oct 09, 2015 1:25 pm, edited 1 time in total.
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Re: Tea stocks are the best contrarian play in the market right now!

Postby Keri » Fri Oct 09, 2015 1:15 pm

Thank you Contra,

The demand for Sri Lankan Tea will increase with global demand increase for tea and other political factors. I have collected some TPL, ELPL and MPRH.

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Re: Tea stocks are the best contrarian play in the market right now!

Postby Contra » Fri Oct 09, 2015 1:26 pm

All three have some sort of value when compare with other plantation stocks. Both MPRH and TPL are more exposure to western tea.MPRH through its tea company (BOPL) has some diversification as well.
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Re: Tea stocks are the best contrarian play in the market right now!

Postby Contra » Fri Oct 16, 2015 11:07 am

This time Kenya is the winner in the tea market. They are getting attractive tea prices for their black Tea in 2015. They are having improved demand for their tea in tea auctions.

http://www.reuters.com/article/2015/10/ ... 9420151014

TABLE-Top price of best Kenyan tea rises at auction

Colombo Tea Auction

Currently, only Western high grown tea has some demand and this variety of tea is fetching above Rs.400 for one kg of tea(average tea prices). All other tea varieties are trading below the average tea prices of Rs.400. However there were some good demand for low grown tea as well at the tea auction held on 13/14 October 2015.

Following are some top prices for Western Teas at the tea auction held on 13/14 October 2015.

WESTERN HIGH GROWN TEAS

BOP Brunswick 580.00
BOPSP Bearwell 470.00
BOPF/BOPFSP Bogawantalawa 550.00
FBOP/FBOP1 Diyagama East 630.00
PEKOE/PEKOE1 Holyrood 540.00
OP1 -
BOP1 *Inverness 510.00
OP/OPA *Bogahawatte 355.00
FF/FF1 Nadoo Totem 460.00
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Re: Tea stocks are the best contrarian play in the market right now!

Postby SHARK » Fri Oct 16, 2015 11:21 pm

plant.png


With Tea prices and Rubber spot prices are set to RISE gradually ...... opportunity awaits for the patience ....... /:)

Time to analyze sector giants and winners in the pack :ymdaydream:


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Sector - Plantation

Postby Jasmine » Thu Oct 22, 2015 3:45 pm

Some of the plantation shares trading at a lowest price in last 5 years.

BALA - 18/-
HOPL - 21.2/-
KVAL - 60/-
KOTA - 22.5/-

What do you guys think about these prices?
Is it good to BUY?
Should we wait a bit for a quarterly report?

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Re: Plantation Shares

Postby SMR08 » Thu Oct 22, 2015 5:07 pm

Contrarians buys it but myself will wait to see some turnaround to happen. May be a couple of or few more months :)

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Re: Plantation Shares

Postby SHARK » Thu Oct 22, 2015 5:24 pm

I think plantation stocks have bottomed out. Therefore better to consider now to enter before rebound.
I am keen to see namu kgal tpl elpl hopl kota n few others shine
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Re: Sector - Plantation

Postby wmdcf » Thu Oct 22, 2015 6:36 pm

Dear Jasmine, I moved this topic into Sector Analysis Forum for further analysis. Thanks.
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Re: Sector - Plantation

Postby Jasmine » Thu Oct 22, 2015 8:44 pm

Thanks wmdcf

wmdcf wrote:Dear Jasmine, I moved this topic into Sector Analysis Forum for further analysis. Thanks.

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Re: Sector - Plantation

Postby SHARK » Fri Oct 23, 2015 12:09 am

Its time we get up close and personal with plantations :ymhug:

you got an array choices from NAMU KGAL WATA TPL HOPL BALA ELPL ..... KOTA :x

who is the chosen one or the few :-\

in my opinion the once that are heavily beaten down are the once will get up faster \:D/

Tea & Rubber
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Re: Sector - Plantation

Postby Contra » Fri Oct 23, 2015 9:03 am

There will be day for out of favor stocks as well. Stocks never stay in the same place.
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Re: Sector - Plantation

Postby Contra » Mon Nov 23, 2015 8:09 pm

Plantation sector has got something special and different from other listed companies from this budget.

•A tax exemption for two years to be provided to tea and rubber growing companies.
•Tea, rubber and coconut research facilities

These proposals will have positive affect on tea and rubber plantation companies.
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Re: Sector - Plantation

Postby stocks hunter » Mon Nov 23, 2015 9:20 pm

Only MPRH is reporting profits in bad times. We should consider that aspect as well SHARK.

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Re: Tea stocks are the best contrarian play in the market right now!

Postby SHARK » Fri Dec 04, 2015 9:58 am

How about analyzing some of the plantation / tea and rubber stocks
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Re: Tea stocks are the best contrarian play in the market right now!

Postby SHARK » Fri Dec 04, 2015 10:00 am

WATA TPL ELPL are my picks going by valuation guide with KGAL too looking good BUY
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Re: Tea stocks are the best contrarian play in the market right now!

Postby wmdcf » Mon Dec 14, 2015 4:16 pm

Sri Lanka tea prices perk up

ECONOMYNEXT - Sri Lankan tea prices perked up at the weekly Colombo auctions possibly in response to urgent orders for the winter, brokers said.

Prices of high grown teas rose sharply and low growns also did better at last week’s sale.

High grown teas from regional plantations companies had “excellent demand,” Forbes & Walker Tea Brokers said.

Teas from the western slopes of the central hills rose 20 rupees a kilo and some types as much as 40 rupees.

High priced teas from Uva region also rose by similar margins for some types.

“An encouraging sale for high and medium grown small leaf teas and perhaps a reaction to urgent shipping requirements,” the brokers said.

Low grown teas, which make up the bulk of the crop, met with “fair demand”, brokers Asia Siyaka Commodities said.
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Re: Tea stocks are the best contrarian play in the market right now!

Postby Contra » Wed Dec 16, 2015 1:19 pm

Suddenly there is a strong demand for tea stocks in India again.

http://www.business-standard.com/articl ... 171_1.html

Harrisons Malayalam, Dhunseri Tea, Rossell India, Jay Shree Tea and Warren Tea were up 5%-13% on the BSE.

Shares of tea companies were trading higher by up to 13% on the bourses in early morning trade in an otherwise subdued market.

Harrisons Malayalam (up 13% at Rs 60.90), Dhunseri Tea(12% at Rs 305), Rossell India (8% at Rs 161), Jay Shree Tea (7% at Rs 85.50) and Warren Tea (7% at Rs 150) have rallied more than 5% each on the BSE.

McLeod Russel, Goodricke Group, Tata Coffee and CCL Products were up 1%-4% as compared to 0.10% decline in the S&P BSE Sensex.

According to tea producers, prices are likely to go up further in March-April, the Economic Times report suggests.

Meanwhile, India's tea production in September dropped 5.4% from a year earlier to 148.81 million kg, the state-run Tea Board said in a statement.

Production in West Bengal dropped 13.5% from a year earlier to 39.24 million kg, while output in southern India dropped 7.33% to 18.34 million kg, the board said,

http://www.thehindubusinessline.com/mar ... 987838.ece

Coonoor tea sale: volume, prices up
PS SUNDAR

http://articles.economictimes.indiatime ... tea-prices

Small-cap tea stocks gain on hopes of price rise

KOLKATA| MUMBAI: Small-cap tea stocks flared up on Tuesday in anticipation of a production shortage which might push up prices in the coming months. Production has slipped 25-30 million kg as erratic weather has hampered output in Assam and West Bengal, the two largest tea-producing states.

Shares of Dhunseri Tea jumped 10.7%; HarrisonsMalayalam rose 7.4%, rising to a three-month high; BK Birla group company Jay Shree Tea gained over 5.7% to an eight-month high. However, after the initial gains, some stocks closed flat, or even marginally lower, during the day.

Goodricke group rose 5.2%, but closed 0.7% lower, while Warren Tea closed 1.9% higher, and Rossell India gained 2.2%. The McLeod Russell stock, the largest tea producer in the country, closed flat after initially rising 5%.

"There's a definite shortage of tea this year — production has slipped 25-30 million kg. Every year, domestic consumption is rising by 30 million kg. So, if we take the drop in production and rise in consumption, the shortage could be 50-55 million kg," DP Maheshwari, managing director, Jay Shree Tea & Industries, told ET.

Tea prices have appreciated by Rs 4-5 per kg at the auctions since October. Maheshwari feels that the prices will rise further by Rs 20-25 per kg when the new season begins in March-April. Kamal Baheti, director, McLeod Russel India, however, reckons that prices will increase by Rs 15-20 per kg for quality teas if production is good.

"Good qualities tea will fetch good prices, but not the inferior quality. If the weather is conducive, then quality tea will be produced," Baheti explained.

At present, leading packet tea players such as Tata Global Beverages and HUL are buying heavily at theKolkata and Guwahati auctions for meeting the demand. "They are buying because even if there's a shortage of good quality tea, they can offer the same quality to its discerning consumers," said Maheshwari.

Indian tea companies can also gain in the coming season as the Kenyan crop hasn't been adequate this year — output in the first nine months of 2015 fell to 271.4 million kg from 315.7 million kg a year ago.
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