Tea price falls to 10-week low at Mombasa auction

A worker loading tea for auction and export. 

Photo credit: File | Nation Media Group

Tea price at the Mombasa auction declined to a 10-week low in the latest trading as the beverage continues to record a poor performance on the back of diminishing demand.

Data from the auction indicates a kilo of tea fetched $2.28 (Sh278) from $2.32 (Sh283) on average in an earlier sale, to mark the fifth time in a row that the value has been declining.

The prices have continued to trade below the government-set minimum price for Kenya Tea Development Agency (KTDA) for over a month now, as the main buyers for Kenyan beverages cut on their purchases.

“The demand has been down for the last couple of sales as Pakistan and Egypt have reduced the quantities that they have been buying from Kenya,” said Peter Kimanga, a tea trader at the auction.

Last year, the two countries accounted for more than 40 per cent of the total tea volumes that were exported. The volume of tea withdrawn during the sale was 5.2 million kilos of the total quantities that had been offered for sale.

East Africa Tea Trade Association, which manages the auction, said there was reduced demand during the sale.

“There was a reduced demand in most categories on offer with irregular prices following quality,” said Eatta.

The Ministry of Agriculture set $2.43 (Sh297) as the minimum price for a kilo of tea for all the KTDA teas last year to safeguard farmers' earnings after the value of the commodity fell below the production cost.

The volumes of tea offered at the auction during the sale were reduced by 33,800, a reversal from the previous week when the quantities grew significantly by over 900,000 kilos.

Previously, the lower prices had been 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.

“The ongoing economic turmoil in Pakistan and a shortage of dollars in Egypt is hitting the volumes of tea that these countries are purchasing at the auction,” Mr Kimanga said.

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