Tea prices at the Mombasa auction dipped further last week, triggering high withdrawals of the commodity that had been offered for sale.
A market report from East African Tea Traders Association (Eatta) indicates that 2.1 million kilogrammes of tea were withdrawn after the price fell to Sh196 from Sh201 for a kilo in the previous sale.
The price of tea has been oscillating at the auction even as the volumes offered for trading continue to decline in recent sales.
The total volume traded last week was 10.5 million kilogrammes, which was a decline from 11.1 kilogrammes that were brought at the auction in the previous sale.
“Out of 12.76 million kilos available for sale, 10.59 million kilos were sold while 17.26 percent remained unsold. The volume offered for sale declined by 580,000kgs,” said Eatta in a statement.
According to the sector regulator, low demand of the beverage has been a contributing factor to depressed earnings.
“Demand has also been affected to some extent by reduced consumer purchasing power due to the effect of the global economic recession that is perpetuated by the Covid-19 pandemic as well as devaluation of some foreign currencies against the US Dollar,” said the Tea Directorate.
Tea earnings in the first four months of this year stood at Sh46.8 billion ($434 million), data from the Central Bank of Kenya shows, down by 5.4 percent from the income of Sh49.5 billion ($459 million) in the corresponding period of 2020.
Last year, buyers had raised their purchases heavily in March and April in anticipation of supply disruptions as countries began to impose restrictions meant to combat the spread of Covid-19.