Nearly half of the tea offered for sale at the auction by the Kenya Tea Development Agency (KTDA) was withdrawn from the trading floor in the latest auction as traders prioritise buying higher quality grades of the commodity.
The Mombasa auction data indicates that 47 percent of the 129,198 packages that were offered for sale were withdrawn after they failed to attract buyers.
These teas have been offered for sale a couple of times in the previous auctions but buyers have been avoiding them because of what traders say is their overpricing based on their quality.
“These are old teas that are being recycled but at the same price, which is way higher than their quality and so buyers are not willing to buy them at that cost,” said Peter Kimanga, a tea trader at the auction.
The government introduced a minimum price of $2.43 per kilo KTDA teas two years ago to cushion farmers from lower prices that had fallen below the cost of production.
However, the minimum price is now impacting negatively on farmers with a lot of rejection witnessed at the auction.
On the contrary, KTDA teas from the East of Rift region have been attracting good prices at the auction because of their high quality.
Mr Kimanga said buyers have opted to buy other teas at $2.43 that are of higher quality compared to the ones that are being sold at this value.
“Buyers cannot just pay higher prices to acquire any quality of tea. Because of the minimum price, they are selective about the teas that they pay for,” said the trader.
The price of tea had remained low at the auction since last June because of low demand. However, the last three weeks have recorded a slight improvement with a kilo of tea on average fetching $2.23 in the sale week marking the highest value to be recorded this year.
