Tea price reverses gains to hit one-month low on political uncertainty

The price of tea dropped by a marginal Sh5 per kilo. file photo | nmg
The price of tea dropped by a marginal Sh5 per kilo. file photo | nmg 

Tea prices at the Mombasa auction slid to a one-month low on Tuesday, reversing a trend of sharp increases in the past few weeks amid panic buying due to political uncertainty in the country.

Market data from the auction indicated that the price of tea dropped by a marginal Sh5 a kilo at this week’s sale to trade at Sh305, down from Sh310 last week. Jitters about prolonged electioneering have triggered a steady rise in tea prices.

East African Tea Traders Association (EATTA), which manages the auction, said the prices realised this week are favourable despite the slight drop.

“This is still a good figure, as we have only lost a few cents, when compared to last week’s trading,” said EATTA managing director Edward Mudibo. In corresponding sale last year, a kilo of made tea was sold at Sh231 on average compared with the current value.

Mr Mudibo said there was demand in the latest sale with buyers still practising cautious buying on Tuesday.

Mr Mudibo pointed out that most teas still traded at above Sh400 per kilo bringing the average price to Sh300. Mombasa is a regional hub for the tea trade with the auction selling teas from more than 19 African countries. Each variety attracts different a price based on quality.

About 132,480 packages (8,630,000 kilos) of tea were available for sale in Tuesday’s trading, where 118,020 packages (7,726,498 kilos) were sold while 9.36 packages remained unsold.

Kenya is a leading exporter of black CTC tea and the beverage earned country $1.226 billion (Sh127.3 billion) last year, which was a drop of 1.7 per cent from the $1.247 billion (Sh129.4 billion) the commodity recorded in 2015.