Kenya’s low tea prices have seen top buyers cut purchases on their alternative source markets in favour of the local beverage at the Mombasa auction, lifting the value of the commodity in the last four sales.
For instance, Pakistan, UK, Egypt and the Middle Eastern countries are procuring nearly all of their teas in Mombasa owing to higher prices in India.
Data from the Tea Directorate indicate that the volumes have been going up since April compared to corresponding period last year.
Pakistan increased its volumes by 14 percent in May and 18 percent in June while the UK enhanced to 66 percent in May and 12 percent in June.
India is the second largest producer of tea in the world but low output will see the export of the beverage drop by 16 percent this year.
The price of the beverage at the auction remained at below Sh200 a kilo for the first half of this year with that of India has risen by 60 percent between April and early this month.
“It is true that the price element could be a factor that is attracting many buyers to Kenyan tea, but that is not the only reason,” said Edward Mudibo, managing director East Africa Tea Traders Association (Eatta).
The tea prices locally have been going up in the last four weeks, which is an indication of high demand. Kenya exports more than 95 percent of its total production.
A rally in price for the Indian tea has been occasioned by heavy rains that have hurt plucking in main producing zones and lack of pickers following the Covid-19 restrictions.
Kenya is a leading exporter of black tea in the world.
Low prices of tea in Kenya have been occasioned by high volumes of the commodity, which has gone up by more than 40 percent in half year to June against 2019.