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Commodities

Tea volumes drop by 10 million kilos in July

Tea volumes in July dropped by 10 million kilogrammes
Tea volumes in July dropped by 10 million kilogrammes. FILE PHOTO | NMG 

Tea volumes in July dropped by 10 million kilogrammes, marking one of the steepest supply cuts in recent years, although low demand has blunted the resultant price increase of the commodity at the auction.

Data from the regulator indicates that the volumes during the review period dropped to 36.5 million kilos from 46.3 million a month earlier.

The Tea Directorate attributed the decline to cold weather during the month.

“The decline in volume follows significant reduction in output in most tea growing areas due to continued cold weather and declining amounts of rains,” said the directorate.

The drop in volume has seen the price at the weekly Mombasa auction go up in the last two months.

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“There are several market dynamics responsible for the increase in tea prices at the Mombasa auction. The most crucial is demand and supply. Since June, the auction has received decreasing volumes of tea that have resulted in improved tea prices for Kenya and non-Kenya teas,” said John Bett, general manager sales and marketing at Kenya Tea Development Agency (KTDA).

Mr Bett said that in June, KTDA managed tea factories produced 27 million kilos of made tea but registered a decline in July and August, recording 17 million kilos.

“Going forward, the market is expected to remain buoyant driven by the interplay of local and global demand and supply dynamics and the speed of recovery from Covid-19 pandemic in key consuming markets,” Mr Bett added.

Demand for tea in the world market has remained depressed because of Covid-19 disruption, which has interfered with the movement of the commodity.

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