Market News

Tea prices rally to five-year high of Sh250 at Mombasa auction

Tea-nandi

Workers pluck tea in Nandi Hills, Nandi County. FILE PHOTO | NMG

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Summary

  • Tea prices rallied to a five-year high at the Mombasa auction, buoyed by the sustained demand for the commodity in key export markets.
  • A kilo of tea leaf sold at a high of Sh250 during this week’s sale, up from Sh244 last week.
  • The good price at the auction saw the volume of tea withdrawn from the trading floor fall to 19 percent from 24 percent in the previous sale.

Tea prices rallied to a five-year high at the Mombasa auction, buoyed by the sustained demand for the commodity in key export markets.

A kilo of tea leaf sold at a high of Sh250 during this week’s sale, up from Sh244 last week.

The good price at the auction saw the volume of tea withdrawn from the trading floor fall to 19 percent from 24 percent in the previous sale.

“There was a good general demand for 133,723 packages (8.7 million kg) available for sale with 107,205 packages (7 million kg) being sold,” said East African Tea Traders Association (Eatta).

The prices at the auction have been going up for the last three months as the minimum price set by government continues to have a positive impact on earnings.

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 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.

“Owing to unfavourable weather conditions experienced this year to date, coupled with the effects of cold temperatures that is expected to continue up to the end of August followed by warm temperatures until October, lower production trend is expected to continue throughout the rest of the year,” said the directorate.