Tea prices at the Mombasa auction have gained significantly in the last three sales as Kenya moves to plug the shortage created by a lockdown in India, causing traders to offload increasing volumes.
A kilo of tea on average fetched Sh222 in the latest sale held last week compared with the Sh215 previous week and Sh205 in the preceding trading as the demand at the auction surges.
East African Tea Traders Association (Eatta) mannaging director Edward Mudibo says India exports 200 million kilos of the beverage to the world and the current coronavirus lockdown has seen restrictions on shipment.
"With a lockdown in India, tea bushes are growing with no one going to the farm for plucking; this has created the vacuum that Kenya is now servicing for the consumers who are not getting the beverage from there," said Mr Mudibo. He said India produces 1.2 billion kilogrammes of tea and it consumes 1 billion kilos with the surplus of 200 million kilos finding its way to the export market.
India has been on a lockdown for 21 days and the Prime Minister Narendra Modi has extended the restriction on movement to May 3, making it the longest lockdown so far globally.
Prices at the auction have been depressed in the last couple of months but have been picking up in the last three sales.
"You would realise that the prices of tea have been rallying in the last three sales and this points to an increase in demand," said Mr Mudibo.
Good prices have seen traders offload more tea at the auction compared with the previous trading where low value saw them withdraw the beverage in huge volumes. For instance, in sale 16 held last week, out of 181,917 packages (12.1 million kilos) available for sale, 170,167 packages (11.3 million kilos) were sold with only 6. 4 per cent of packages remaining unsold.
Mombasa is the second largest tea trading auction in the world after Colombo, Sri Lanka but Kenya is the leading exporter of Black CTC globally. Kenyan tea is considered one of the best in the market because of its unique taste and international buyers normally make purchases to blend with other low quality leaves.