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Money Markets

Kenyan tea records marginal rebound at Mombasa auction

Workers in a tea estate in Kericho.  PHOTO | FILE
Workers in a tea estate in Kericho. PHOTO | FILE 

The price of Kenyan tea jumped three per cent in this week’s sale at the Mombasa auction, rebounding after a dip in the previous trading session.

The price increased from Sh295 last week to Sh305 in this week’s sale on Tuesday. Last week, the price of the commodity lost its value for first time this year, after registering a streak of gains in the previous six sales.

At the same time, the volumes at the auction grew by 357,486 kilogrammes — from 5.9 million to 6.3 million kilogrammes in the latest sales.

“Out of 116,361 packages (7,520,000kg) available for sale, 98,401 packages (6,352,440kg) were sold with 15.43 going unsold,” said Edward Mudibo, managing director of the East African Tea Traders Association. According to lobby group, Pakistan Packers maintained support at the auction but at lower levels and there were more enquiries from Afghanistan, Bazaar and Sudan.

Egyptian Packers, Yemen, Middle Eastern nations and Russia showed good interest but at lower rates while Kazakhstan remained active at the auction.

Tea production has, however, dropped in factories with the regulator saying that the volumes are down 40 per cent at the moment.

Head of Tea Directorate Samuel Ogola said most factories are currently operating below their installed capacity due to the ongoing drought that had reduced yields.

Record earnings

According to the regulator, the current drought is expected to cut tea production by 12 per cent to 416 million kilogrammes from 473 million registered last year.

Kenya is the leading exporter of the commodity in the world, with the crop earning the country Sh125 billion from sale of the commodity in 2016. Last year, small scale tea holders affiliated to Kenya Tea Development Agency earned Sh84 billion, a record high.

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