Markets & Finance

Mombasa tea auction starts live data feeds

tea

East Africa Tea Trade Association members during an auction session at Tea Trade Centre in Mombasa Sep 9, 2014. PHOTO | KEVIN ODIT

Tea brokers have begun real-time streaming of the Mombasa tea auction to authorised stakeholders ahead of the April implementation of electronic trading, amidst strongly contested accusations of price manipulation.

The East African Tea Trade Association (EATTA) that runs the auction at the Tea Trade Centre says the move will provide transparency in the way bids are communicated.

The lobby says the auctions have been available online since August 25, with the net-cast capturing buyers’ bids and the accepted final bids by brokers.

“There shall also be instantaneous data visualisation and analysis, automated data warehousing and historical achieving, quick and efficient post-auction reconciliation and world-class auction floor operations,” said EATTA managing director Edward Mudibo.

The tea auction has been under the microscope recently following damning media reports quoting a Tea Board of Kenya industry status report that accused various players of manipulating the price of high-grade tea to sell at the same price as lower grade tea at the auction.

The report also blames some big marketers who sell directly outside auction for creating a huge price difference while giving the impression of excess tea in the market.

EATTA said Kenya experienced high production towards the fourth quarter of 2013 and that the upward and downward trends in tea prices are cyclical, depending on supply and demand.

Tea prices have been lower in 2014, with the average price for Kenyan tea at the auction last week standing at Sh204 a kilo compared to Sh233 per kilo the same period in 2013.

READ: Pain as tea prices hit six-year low

In the meantime EATTA has announced it is finalising the integration of Equity and Citi banks platforms to effect the real-time electronic tea sales payment system introduced in 2010.

The live transaction is only offered through CFC Stanbic Bank. The government has been pushing for reforms in the way tea trading is handled at the auction.

During a meeting with sector stakeholders in June, President Uhuru Kenyatta called for the fasttracking of an electronic tea auction in Mombasa through a public-private partnership, to improve transparency and efficiency.

Mr Mudibo says the electronic auction is expected to be operational by April next year.

“A steering committee comprising a cross-section of members of the East African Tea Trade Association has put in motion deliberations to actualise the Electronic Tea Auction,” he said.

The EATTA-run Mombasa tea auction is the largest black tea exchange centre in the world, with 32 per cent of the tea exported to the world passing through it.