Commodities

Tea price flat on balanced supply and demand

tea

A woman plucks tea on a farm in Kiptagich, Kuresoi South in Nakuru County along the Olenguruone- Bomet road in this photo taken on Monday, May 03, 2021. PHOTO | JOHN NJOROGE | NMG

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Summary

  • The East African Tea Trade Association (Eatta) said the average price per kilogramme of the product was Sh239, similar to the previous auction.
  • The price of the beverage had been declining in previous sales due to an increase in supply and a general decline in international prices.
  • At the beginning of this month, the average price of the beverage stood at Sh244 per kilogramme.

The price of tea at the Mombasa auction was flat in this week’s auction, with healthy demand balancing out increased supply and declining international prices.

The East African Tea Trade Association (Eatta) said the average price per kilogramme of the product was Sh239, similar to the previous auction.

The Eatta said 16 percent of the tea brought to the market remained unsold this week, with sellers withdrawing them due to the stagnant price. It added that 183,575 packages or 12.13 million kilogrammes were offered for sale, with 154,040 packages (10.27 million kilogrammes) taken up by buyers.

“There was a strong and useful enquiry from Egyptian packers with more support from Kazakhstan...while Pakistan packers showed useful interest. Yemen, other Middle East countries, Russia, UK, Bazaar and Iran reduced activity but there was more interest from Sudan,” said Eatta.

“Afghanistan was subdued and there was less support from local packers. Somalia was active at the lower end of the market.”

The price of the beverage had been declining in previous sales due to an increase in supply and a general decline in international prices. At the beginning of this month, the average price of the beverage stood at Sh244 per kilogramme.

The price would be much lower though if the Agriculture ministry had not moved to set a minimum price of $2.43 per kilogramme from August after the cost of tea hit a decade low of Sh186.

The generally lower prices have translated into reduced income for farmers, with tea the only major agricultural commodity to record a fall in export income this year.

Tea earnings in the 10 months to October dropped by 6.3 percent to Sh105.92 billion ($971 million) from Sh113.0 billion ($1.036 billion) due to the impact of accelerated purchases in 2020.

Coffee exports rose by 15.1 percent in the period to hit Sh24.1 billion, while horticulture exports went up by 23.8 percent to Sh108.8 billion.

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