Commodities

Tea prices at Mombasa auction hit lowest level this year

AUCTION

Tea Trade Centre in Mombasa. FILE PHOTO | NMG

Tea prices at the Mombasa auction dropped in this week’s sale to touch the lowest value in 2018 even as the volumes offered for trade continued to decline.

On average, a kilogramme of tea traded at Sh268 on Tuesday down from ShSh275 in the previous sale held last week.

The volumes offered for sale during the auction went down by 367,721 kilogrammes for the ninth time in a row that the quantities have been dipping.

However, at Sh275 per kilo, the price is slightly higher when compared with the same period last year when the same quantity traded at Sh276 on average.

“Out of 126,273 packages (8,210,000 kilos) available for sale, 111,579 packages (7,243,575 kilos) were sold with 11.63 per cent of the packages remaining unsold,” says a report from East African Tea Traders Association.

The Tea Directorate had said last year that the expected drop in volumes would firm up the price in the coming sales resulting from tight volumes amid high demand of the beverage in the market.

READ: Tea prices dip after rising at weekly auction

The Mombasa auction, the second largest black CTC tea market in the world, recorded the third highest price in 2017 per kilo of the commodity globally.

At Sh306 per kilo, the auction came third after Sri-Lanka and Rwanda, which offered its farmers Sh414 and Sh311 respectively for the same quantity. The high price helped to lift Kenya farmers’ earnings to Sh129 billion last year, from Sh120 previously, making it the highest in the last five years, according to the tea directorate.

Kenya is the leading exporter of black CTC teas in the world accounting for about 24 per cent of the global exports.

The country exports the bulk of its teas to Egypt, UK, Pakistan, Afghanistan, Iran, Sudan, Yemen and UAE.  The tea directorate is scouting for new markets to cut overreliance on the traditional ones.