Tea prices at the Mombasa auction rallied for a second consecutive week, helped by improved demand amid lower volumes being presented on the trading floor.
Data from the Tea Brokers East Africa Limited shows the price of the commodity increased to $2.39 (Sh276) from $2.37 (Sh273) in the previous sale, raising farmers’ prospects for good earning this financial year.
The volumes of tea offered for sale this week decreased to 12.7 million kilos from 13.39 million in the previous trading session.
“Good general demand prevailed for the 192,979 packages (12.7 kilos) available in the market,” said the report by the Tea Brokers.
Prices had fallen in the previous four weeks before the current rally, offering a reprieve to tea farmers whose secondary earnings—normally referred to as bonus—are based on the auction prices.
Kenya Tea Development Agency (KTDA) will pay farmers a mini bonus of Sh3 billion this month, one of the highest payments made in the last five years.
Farmers in Embu, which is in the East of Rift region, will be the highest-paid this year at Sh10 a kilo, continuing their dominance as the best-paid growers in the country.
Even with the improving prices, there remain concerns about the fate of the key market of Russia, which is currently embroiled in a war against Ukraine.
Russia exporters remained absent from the market for a fifth straight session last week, tea brokers said.
Traders are jittery of selling tea to Russia, which is one of the top 10 buyers of Kenya’s beverage, for fears that there will be payment delays since the business is normally transacted in dollars.
Russia has been slapped with sanctions by European countries and the US, including the exclusion of Moscow from SWIFT — a payment system that allows banks to transact with other financial institutions.