Tea prices at Mombasa auction fall as volumes rise
East Africa Tea Trade Association members during a past auction in Mombasa. PHOTO | FILE
What you need to know:
A kilo of tea on average sold at Sh291 during last auction from Sh300 in the previous sale.
But in comparison with the corresponding period last year, the price of the beverage has improved significantly.
The same time last year, a kilogramme of made tea was selling at Sh191 compared to the current price of Sh291.
Tea prices at the Mombasa auction have dropped for the third time in a row as the volumes offered for sale grew by more than half a million kilogrammes at last week’s auction.
A kilogramme of tea on average sold at Sh291 during last auction from Sh300 in the previous sale.
The quantities of tea supplied for sale grew from 6.4 million kilogrammes in the previous sale to seven kilogrammes last week.
“We witnessed a decline in tea prices in our last sale at the auction, with prices coming down by about Sh10,” said Edward Mudibo, managing director of the East African Tea Traders Association.
However, in comparison with the corresponding period last year, the price of the beverage has improved significantly. The same time last year, a kilogramme of made tea was selling at Sh191 compared to the current price of Sh291.
In 2014, the price of tea was hard hit by a glut of the commodity in international market, an event that saw Kenya’s tea register a historical six-year low of Sh1.90 per kilogramme.
The government this year contracted Jomo Kenyatta University of Agriculture and Technology to undertake a study and develop a model to guide the minimum price payable to smallholder farmers for green leaf delivered. It is also to recommend a sustainable model and modalities for establishing a price stabilisation fund.
The Ministry of Agriculture said the report would be crucial in identifying the mechanisms that will cushion farmers against low earning in times of oversupply of tea in the market.
The State has also been pushing for an increase in local consumption of tea, to cushion growers against losses when the international prices are low.
Kenyans only consume about five per cent of the tea with 95 per cent destined for global market.
Kenya is the leading global black tea exporter, selling 400 million kilogrammes to the global market annually, with only 25 million kilogrammes of the beverage consumed locally.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
