Traders withdraw more tea from Mombasa auction on low demand

The volume of tea withdrawn from the floor of the Mombasa auction remains high due to low demand for the commodity at the weekly trading.

Data from East African Tea Traders Association (Eatta) indicates that 23 percent of the volume of the commodity that was offered for sale at the auction was taken out of the trading in the latest sale held last week.

According to Eatta, out of 8.9 million kilogrammes that were offered for sale, 6.8 million were taken out.

“The fact that the out-lots remain high means that the demand is still suppressed at the auction,” said Eatta managing director Edward Mudibo.

Mr Mudibo said the tea that was taken out of the auction will be reoffered for sale again in three weeks’ time.

The price of tea during the latest sale improved marginally from Sh213 previously to Sh214 per kilogramme, continuing the recent trend of rising prices.

The tea sector regulator has said the volumes of tea will remain low in the coming months due to the cold season witnessed in June and July and the expected cessation of rains.

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

Tea exports to Kenya’s major markets dropped by 3.4 million kilogrammes to 289.1 million kilogrammes in the seven months to July compared with the same period last year, data from the Tea Directorate indicates.

Most of the tea importing countries, are still battling with the effects of the Coronavirus, slowing the purchases since March this year when the outbreak was first announced in the country, leading to both logistical challenges and low demand of the commodity.