Commodities

Tea traders reduce withdrawals as auction price improves

tea

Workers use tea picking machines in a tea plantation in Kericho. FILE PHOTO | NMG

geraldandae

Summary

  • The volumes of tea withdrawn from the auction floor this week in Mombasa went down by four percent as the price of the beverage increased during trading.
  • Data from the East Africa Tea Traders Association (Eatta) indicate that the withdrawals stood at 14 per cent last week from 18 per cent in the previous sale.
  • The average price of the commodity increased to Sh212 from Sh205, marking it one of the best prices since the year began.

The volumes of tea withdrawn from the auction floor this week in Mombasa went down by four percent as the price of the beverage increased during trading.

Data from the East Africa Tea Traders Association (Eatta) indicate that the withdrawals stood at 14 per cent last week from 18 per cent in the previous sale.

The average price of the commodity increased to Sh212 from Sh205, marking it one of the best prices since the year began.

“Out of 13.6 million kilos available for sale, 11.6 million kilos were sold with 14.07 percent remaining unsold,” said Eatta in the market report.

The price of tea had started on a good note this year, rallying for two consecutive sales before dipping in the third week of January.

Compared with the corresponding time last year, the price is still lower. In the fifth sale of 2020, the commodity fetched Sh227 against the current Sh212 for a kilo.

Kenya’s tea is still facing demand challenge in the world market as effects of Covid-19 are still taking a toll.

The lower prices have also been attributed to increased volumes in the world market. Kenya is the leading exporter of the commodity with over 95 percent of the total produce shipped outside the country.

Tea exports to Kenya’s major markets dropped by 2.7 million kilos in the 10 months to October compared with a similar period in 2019 as the markets record a sluggish growth following months of restriction in trade, occasioned by Covid-19.

Central Bank of Kenya data shows that tea export earnings stood at Sh134.3 billion last year, a 10 percent increase compared to the Sh122.04 billion the beverage fetched for the country in 2019.