Tea prices at the Mombasa auction hit a two-month high in the latest sale and marked the third time in a row that the commodity has registered a growth in price.
Data from the Mombasa Tea Auction indicates that the price rose marginally from Sh274 last week to Sh275 in the latest sale. The volume of tea offered for sale at the auction also increased by 39,000 kilogrammes.
Tea Directorate says that the increased quantities, despite the drought in the previous months, result from the stocks that were carried over from last year.
“Out of 134,729 packages (8,860,000kg) available for sale, 119,348 packages (7,767,097kg) were sold with 11.41 per cent remaining unsold,” says East African Tea Traders Association in the report.
Tea production for 2017 is expected to drop by 11 per cent due to the effects of the drought that has cut volumes from the farms. Agriculture and Food Authority says production of the green leaf will this year drop to about 420 million kilos from 473 million kilos produced in 2016.
The price is, however, expected to improve during the period as a result of the decline in supply.
Tea production for 2016 reached an all-time high of 473 million kilogrammes, which was 18.4 per cent higher compared with 399 million kilogrammes recorded in 2015.