Economy

Boost for farmers as tea price increases

tea

Workers at a tea estate in Kericho. FILE PHOTO | NMG

geraldandae

Summary

  • A kilo of tea at the Mombasa auction rallied to Sh203 from Sh170 in the previous sale held last week.
  • The jump in value of the beverage could be attributed to a minimum price that the government set a fortnight ago to safeguard smallholders’ earnings.

Small scale tea farmers got a reprieve at the auction on Tuesday as the cost of the commodity rose by the highest margin since January in response to a State-backed reserve price.

A kilo of tea at the Mombasa auction rallied to Sh203 from Sh170 in the previous sale held last week, reversing months’ long poor prices witnessed since May of this year.

The jump in value of the beverage could be attributed to a minimum price that the government set a fortnight ago to safeguard smallholders’ earnings after the cost of the commodity fell below production.

“There was improved demand with auction offering better absorption for the 163,760 packages on offer and only 18.76 remained unsold,” said Tea Brokers in a market report.

Last week, six million kilos of teas offered for sale were withdrawn out of the market for lack of bids. The volumes dropped to 1.9 million kilos on Tuesday, highlighting high demand witnessed during this week’s trading.

Agriculture Cabinet Secretary Peter Munya said an increase in value is an indication that the reserve price is now working.

“Buyers are now paying above the reserve price and this is a confirmation that the set price is now working, after reluctance from the buyers in the last two weeks,” said Mr Munya.