Markets & Finance

Tea prices up on Easter demand

factory

Workers at the Iriaini Tea Factory in Nyeri County inspect tea lorries. Tea prices at the Mombasa auction rose this week.Photo/FILE

Tea prices saw a marginal increase ahead of the Easter holidays when the auction will take a break.

Average tea prices at the Mombasa auction were up eight US cents (Sh6) from last week’s price, with players attributing it to increased demand from buyers. The beverage traded at $2.20 (Sh189.2) per kilogramme compared to $2.12 (Sh182) last week.

“We have seen a slight improvement from last week as buyers rushed for stock to cover the period that the auction will be closed for holidays,” said Global Tea & Commodities (K) Ltd executive officer Peter Kimanga.

Mr Kimanga, however, said prices would be poor for the better part of the year due to increased supply and heavy rain that is taking a toll on the quality of green leaf delivered to factories.

“The crop levels have been building up, suppressing the demand,” he said.

Low prices could see farmers take less care of the bushes because of high cost of production. Kenya Tea Development Agency (KTDA) has warned farmers of reduced earnings because of poor international prices.

“Tea producers will be negatively affected by the drop in tea prices. This is expected to have a negative impact on tea earnings by growers this year,” said KTDA chief executive Tiampati Lerionka in a statement.

READ: Financiers hit by defaults over falling tea prices

The Tea Board of Kenya, which regulates the market, said unsold tea from previous auctions had caused a glut leading to a dip in prices.

The tea prices have been going down since last year, before gaining slightly in January this year to trade at an average of $2.70 (Sh232) per kilogramme. This was the highest price in the previous 14 sales.

The government is considering options for containing the price swings to protect farmers.