Workers of Iriaini Tea Factory in Othaya inspect lorries carrying tea leaves as they are offloaded. PHOTO | FILE
What you need to know:
Tea prices have remained depressed since last year and farmers are expected to earn the lowest bonus payment for the 12 months to June due to a supply glut.
There are little signs that the price will recover this year for the major foreign exchange earner.
The price of tea at the Mombasa auction last week dropped to a three-month low, reversing price gains made in the past three weeks.
Data from the auction shows that the average tea prices stood at $2.20 (Sh193) a kilo down from $2.49 (Sh216) at the previous sale, meaning that the crop has lost Sh25 over the past three weeks.
Tea prices have remained depressed since last year and farmers are expected to earn the lowest bonus payment for the 12 months to June due to a supply glut.
There are little signs that the price will recover this year for the major foreign exchange earner.
“The drop represents a three-month low, with the prices having picked up in the recent days,” said Peter Kimanga, a director at Global Tea & Commodities.
Growers were paid a record Sh69 billion for the 2013 crop season (July to June) beating the Sh61 billion that had been paid in each of the previous two years.
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 30 sales.
The Tea Board of Kenya, which regulates the market, blamed unsold tea from previous auctions for the glut that led to the dip in prices. Last year, 4.8 billion kilogrammes of tea were produced globally against consumption of 4.6 billion.
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