Markets & Finance

Tea prices at auction rise on low supply

TEA

Workers pick tea. In last week’s auction, a kilogramme of made-tea sold at Sh257 compared to Sh192 at the same time last year. PHOTO | FILE

The price of tea at the Mombasa auction has gone up by 33.8 per cent in the last one year, helped by poor weather that has cut supply of green leaf.

In last week’s auction, a kilogramme of made-tea sold at Sh257 compared to Sh192 at the same time last year.

Farmers have been enjoying good prices since the beginning of the year which may signal better fortunes after last year’s historically poor prices.

“The price of tea is now firming at the Mombasa auction compared to last year,” said Lerionka Tiampati, the managing director of the Kenya Tea Development Agency (KTDA).

However, the low supply has significantly cut volumes at the auction in the last five months.

According to the KTDA, volumes of made-tea dropped 28 per cent in the month of February compared to the same period in 2014.

READ: Tea shortage pushes up prices at Mombasa auction

The drought that started last December saw the volumes of made-tea drop to 24.2 million kilogrammes from 33.7 million kilogrammes in the same period in 2014.

It affected major tea producing zones, causing KTDA green leaf production in February to decline by 36 per cent to 56 million kilogrammes from 88 million kilogrammes produced same period last year.

The tea agency said even with the onset of the rains, tea bushes will take time to recover because the dry spell was followed by hostile weather pattern characterised by hailstorms and frost in some growing regions.