The value of tea at the Mombasa auction rallied last week to trade above the two dollar mark on average, raising hopes of a better earnings for farmers in the current financial year.
A kilogramme fetched $2.04 (Sh220), up from $1.97 (Sh212) in the revious week.
The better price saw traders cut the volume of tea withdrawn from the sale—26 percent of the total volumes from a high of 30 percent in the previous sale.
“There was good general demand for the 121,938 packages (7.9 million kilogrammes) available at irregular levels for sale with 89,879 packages (5.8 million Kilos) being sold,” said East African Tea Traders Association (Eatta).
The prices at the auction have generally gone up in the last two months, aided by a government directive on minimum reserve price issued in July.
The Ministry of Agriculture requires traders to pay a minimum of Sh183 for a kilogramme of Kenya Tea Development Agency teas at the auction, and was put in place following a sharp decline in prices that the government said was subjecting farmers to losses.
Multinational firms also followed suit and they have indicated that they will be setting a minimum price for their teas at the auction to cut on losses occasioned by low cost of the commodity in the market.