Tea prices rise marginally as unsold stocks increase supply
Workers pick tea. In last week’s auction, a kilogramme of tea traded at Sh201. FILE
What you need to know:
The tea prices have been going down since last year, before gaining slightly in January to trade at an average of $2.70 (Sh232) per kilogramme.
In last week’s auction, a kilogramme of tea traded at $2.34 (Sh201), rising marginally from the previous auction where the same quantity attracted $2.15 (Sh185).
Kenyan tea has registered marginal growth in prices at the Mombasa auction, with the regulator blaming unsold volumes from previous auctions for the flat market.
The tea prices have been going down since last year, before gaining slightly in January to trade at an average of $2.70 (Sh232) per kilogramme. In last week’s auction, a kilogramme of tea traded at $2.34 (Sh201), rising marginally from the previous auction where the same quantity attracted $2.15 (Sh185).
The Tea Board of Kenya (TBK) attributed the move to the new entrants who are now bidding for the crop directly from the auction.
New entrants
“We have witnessed high participation of the new entrants from China, Yemen and Russia bidding directly from the auction, unlike previously where they would rely on buyers for the supplies,” said TBK acting managing director Zakayo Magara.
Mr Magara said the unsold stocks increased the supply, hence affecting the prices as a result of low demand from the buyers. However, he said the volumes of tea would come down on increased participation by new buyers.
Last year, Kenya saw a surge in tea volumes with the farmers attached to Kenya Tea Development Authority (KTDA) delivering 1.1 billion kilogrammes of green leaves compared to the previous year where they supplied a total of 907 million kilogrammes.
Tea buyers have pointed out that there is an indication of volumes going down, signalling the rebound in prices of the commodity that is one of the country’s leading foreign exchange earners.
Global Tea & Commodities (K) Ltd executive officer Peter Kimanga said they are witnessing reduced volumes as a result of the dry spell that has hit some parts of the country.
TBK, will, however, release the latest data of the January volumes next week.
Mombasa auction serves the countries from Eastern and Central Africa with the Rwandan tea currently attracting $2.50 (Sh215) and the Uganda brands trailing at an average of $1.17 (Sh101).
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Note: The results are not exact but very close to the actual.
