Tea prices at the Mombasa auction have for the first time in nine months traded above the government set minimum price as the beverage continues to record impressive performance.
Data from the East African Tea Trade Association (Eatta) indicates that a kilogramme of the commodity traded at $2.46 from $2.42 in the previous sale.
The price of tea at the auction has for the last nine months been selling at below $2.43, which is the minimum price that the Ministry of Agriculture set for all Kenya Tea Development Agency (KTDA) produce.
The KTDA accounts for at least 85 percent of the total tea that is sold through the Mombasa auction.
Beverage from other 12 African countries also trade at the facility.
The good price also saw the volume of tea withdrawn from the auction decline to 29 percent down from 31 percent that was recorded in the previous sale.
“There was good demand but at irregular levels with prices following quality for the 197,500 packages (13.2 million kilogrammes) available for sale. 139,740 packages (9.3 million kilos) were sold with 29.25 percent of packages remaining unsold”, said Eatta.
The price of tea at the auction has for the last seven weeks been on the upward trend, raising farmers’ hopes of good earnings in the current financial year. The weekly sale had been witnessing low prices since June this year.
The lower prices were attributed to a decline in demand from buyers owing to the economic woes in Pakistan and the Russia-Ukraine war that resulted in logistical challenges.
Also read: Tea prices at Mombasa auction holding steady
Data from the Tea Directorate indicates that tea earnings in seven months to July grew to Sh80 billion when compared with Sh71 billion that was recorded in corresponding period last year. The price per kilo in the review period went up to $2.53 from $1.93 in the previous season, boosted by a relatively high demand for the beverage and high exchange rate against the shilling.