Tea prices register marginal increase at auction on firm demand

Tea prices at the Mombasa auction rallied marginally in this week’s trading on the back of a fair demand despite an increase in volumes.

Data from Tea Brokers East Africa Limited indicates the price of the beverage increased to $2.37 (Sh272) from $2.36 (Sh271) in the previous sale.

The volumes offered for sale this week increased by 300,000 kilogrammes to 13.39 million kilos during the sale.

The marginal rise in price, however, saw the percentage of tea withdrawn at the auction increase to 13 percent from 11 percent last week.

“Good general demand prevailed for the 204,210 packages (13.39 million kilos) in the market,” said the report by the Tea Brokers.

Prices have been declining consistently in the last four weeks and the recent increase in the last two sales comes as a reprieve to the farmers whose second earnings — normally referred to as bonus is based on the auction prices.

Jittery traders

Russia exporters were absent in this week’s trading, according to the tea brokers, marking a month-long of inactivity by these buyers at the auction.

Traders are jittery about selling tea to Russia, which is one of the top 10 buyers of Kenya’s beverage, for fears that it will take them long to get payments for supplies made as 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.

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