Commodities

Tea prices register marginal rise at auction on Egyptian demand

tea

A woman picks tea leaves in Nyeri. FILE PHOTO | NMG

Tea prices at the Mombasa auction rose marginally in this week’s trading when there was strong interest from Egyptian packers.

Data from the Tea Brokers East Africa Limited indicates the price of the beverage per kilogramme increased to $2.36 (Sh266.9) from $2.3 (Sh263.4) in the previous sale.

“There was strong interest from Egyptian packers and bazaar with useful support from Pakistan packers. Yemen, other Middle Eastern countries and Sudan maintained activity while UK and Afghanistan showed more enquiry,” a report by the tea broker said.

“Kazakhstan and other CIS states were more selective with Iran showing some interest while Russia were quiet. There was less participation from local Packers. Somalia were active at the lower end of the market.”

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.

Traders are jittery of selling tea to Russia, which is one of the top 10 buyers of Kenya’s beverage, fearing it will take them long to get payments for supplies made as the business is normally transacted in dollars.

The price of the commodity had been falling in recent weeks before the latest slight increase. The prices are, however, significantly higher compared to the corresponding period last year.

The percentage of tea withdrawn at the auction declined significantly from 17 percent last week to 11 percent.

“Good general demand prevailed for the 198,620 packages in the market at irregular levels with 11.78 percent unsold,” the report by the tea broker said.

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