Tea prices at the Mombasa auction dipped marginally even as the volumes offered for sale declined in this week’s trading.
A market report from the auction indicates that a kilogramme of tea fetched Sh206 on Tuesday down from Sh207 last week.
About 17 percent of the total tea that was offered for sale this week was not sold as compared with 16 percent in the previous trading. The price of the commodity still remains within a four-year low, a position it has held since February this year.
“Out of 167,105 packages (10,820,000 kilos) available for sale, 137,865 packages (8,960,731 kilos) were sold with 16 percent of the packages remaining unsold,” said East African Tea Traders Association in the report.
Reducing volumes at the auction was expected to push the price up in the coming sales. The quantities offered for sale have been declining in the last four sales. This week’s volume dropped from 9.3 million kilos to 8.9 million.
Buyers at the auction had last month projected the price of the commodity was poised to go up in the coming sales as a result of the ongoing drought, which has cut the supply of green leaf to the factories.
It was expected that panic buying resulting from anticipated shortage would push up the price above the current lows.
The Tea Directorate has forecast that the volumes of the beverage will this year drop to 416 million kilos from a high of 474 million kilos last year. The decline, says the directorate, will see the average auction price surge to Sh280 a kilo up from Sh260 achieved in 2018.