Tea prices drop to one-year low at Mombasa auction

Tea prices at the Mombasa auction have touched over one-year low as the beverage continues to underperform at the weekly auction amid growing volumes.

In the last week auction, a kilogramme was on average valued at Sh260, the price that it last touched in the first sale of 2016.

The directorate anticipates the prices to remain low as more tea is expected in the market following the onset of rains in most parts of the country.

“There is a likelihood the prices will dip further because we are now witnessing a growth in volumes, which will affect the cost,” said an official at the directorate.

In the sale held last week, tea volumes grew by 12.68 per cent, marking a major increase in offers. The auction had started on a high of Sh270 in the first sale of the year, with the value oscillating through the auctions.

The volumes of tea at the auction hit a high of 10 million kilos in January this year before dropping to a low of 6.7 million last month and settling at 7.7 million kilos.

READ: Kenya’s tea exports to traditional markets down 30pc in January

Production for the month of February was 27.93 million kilogrammes against 22.60 million kilos during the corresponding month of 2017, the Tea Directorate says.

The increase in production was largely attributed to rains experienced in the west of the Rift (Kericho, Kisii) that saw the region’s output rise from 12.23 million kilogrammes to 18.65 million kilos.

The directorate says good yields were also recorded within the estate sub-sector with output increasing from 8.88 million kilogrammes to 12.01 million in the period under review.

But owing to drier weather coupled with less rainfall, the output in Mount Kenya area dropped marginally from 10.37 million kilogrammes recorded in February 2017, to 9.28 million kilos even as production in the small-holder sub-sector rose from 13.71 million kilogrammes to 15.92 million kilos