Tea prices are likely to remain low in the coming months as the traditional buyers of the Kenyan commodity approach the summer season.
Traders at the Mombasa based auction noted that slight improvement this week will not hold in the coming months as demand of the beverage from buyers was still low.
A kilogramme of made tea at the auction went up by $0.04 to sell at $1.98 compared to last week’s $1.94. KTDA tea attracted $2.18 this week which was an improvement from the previous auction where it traded at $2.16.
Peter Kimanga, a director at Global Tea & Commodities, a trading house, said the prices might only climb starting October in the onset of winter when the demand will be high.
“The major buyers of our tea are heading to summer and they will not be buying high volumes of tea during this season as they would in winter,” said Mr Kimanga.
United Kingdom, Pakistan and other European countries are the major importers of the Kenyan tea.
The price of tea has been dropping since last year in what has been attributed to increase in supply of green leaf from farmers.
About 1.1 billion kilogrammes of green tea was delivered to the 66 KTDA managed tea factories last year compared to 907 million kilogrammes in 2012.
Kenya is the world's leading exporter of black tea with the commodity being the top foreign exchange earner for the country, coupled with horticultural products and tourism.
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