Tea prices at the weekly Mombasa auction continue to hold steadily, after a streak of poor performances in September and August.
The value of the beverage rose to $2.37 per kilogramme (Sh286) in the latest sale when compared with the previous trading where it fetched $2.32 (Sh280).
This marks the fourth week in a row that the price of the beverage has taken an upward trend at the sale.
The price increase, which was boosted by demand, comes on the back of a rise in the volume of tea, which was offered for sale during the session. The quantities were 120,000 kilogrammes more than the previous auction.
“There was a good demand for the 185,020 (12.3 million kilogrammes) on offer with 129,380 (8.6 million kilogrammes) were sold,” said East African Tea Trade Association.
The better returns saw the quantity of tea withdrawn from the auction floor fall to 29 percent from a high of 33 percent last week as producers released more produce to the market to benefit from the good offers.
Low prices in the last two months had caused jitters in the industry as stakeholders fretted over declined earnings in the current financial year after the price of tea remained low for an extended period of time.
Lower earnings were attributed to a decline in demand from buyers owing to the economic woes in Pakistan and the Russia-Ukraine war that resulted in logistical challenges.
Pakistan is the top buyer of Kenya’s tea accounting for nearly 40 percent of the total produce sold at the sale.
Pakistan has been in financial turmoil for some time, with the government restricting imports in order to stabilise its economy.
The Russian invasion of Ukraine in late February drastically cut the supply of the beverage to Moscow, which is Kenya’s 5th largest buyer.
The low absorption of tea by the leading buyers meant that huge volumes of tea were not being offloaded from the auction, resulting in a high supply at the market.
