Traders withdraw offers at tea auction on price drop

The price of tea at the Mombasa auction declined for the first time in the last six weeks, forcing traders to withdraw 25 percent of the total beverage offered for sale.

Data by the East African Tea Traders Association (Eatta) indicates the price dropped to Sh250 a kilogramme(kg) in the review period from Sh287 previously.

The decline in value saw traders withdraw 2.3 million kilogrammes from the trading floor to offer it back for a resale this week if the prices will be in their favour.

“There was a good but irregular demand for the 145,473 Packages (9.5 million kilos) available for sale with 108,935 packages (7.1 million Kilos) being sold,” said Eatta.

The volumes of tea offered for sale went up by 63,916 to reverse the trend in the last two weeks where the kilos offered for sale have been declining.

The tea directorate had projected that the price of the beverage will continue rising in future sales as the sector regulator forecasts a decline in production, which will cut down on supplies, hence increasing demand.

Tea production in the half-year to June declined by 26 million kg when compared with the corresponding period last year on the back of unfavourable weather.

Tea Directorate says green leaf delivered to factory between January and June was 274 million kg when compared with 300 million kg that was realised in the same period in 2020.

The directorate said the unfavourable weather conditions experienced this year, coupled with the effects of cold temperatures that are expected to continue into August and followed by warm temperatures until October would see a lower production trend continue throughout the rest of the year.