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Commodities

Tea price decline persists despite drop in volumes

Mombasa auction
Tea traders at the Mombasa auction. FILE PHOTO | NMG 

Tea prices at the Mombasa auction fell even as volumes offered for sale declined in the Tuesday auction. A kilo of tea fetched Sh231 this week, down from Sh237 in the previous sale.

East African Tea Traders Association, which manages the auction, had last week forecast that the price of the commodity was expected to improve on account of low supply. “We expect the price to pick in the coming days as the shortage of tea resulting from cold weather is likely to push up the cost,” it had said. The volume offered for sale this week dropped by more than 600,000 kilos from 9.2 million to 8.5 million. Poor prices witnessed in the financial year ended June point to low earnings for farmers in second payment towards the end of the calendar year.

Growers affiliated to Kenya Tea Development Agency earned Sh42 billion as the second payment last year. This was lower by Sh2 billion than a record high of Sh44 billion earned in 2016.

The bulk of the tea from small-scale farmers is sold at the Mombasa auction before it is exported to Egypt, the UK, Pakistan, Afghanistan, Iran, Sudan, Yemen and the United Arab Emirates.

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