Traders offload more tea as price rally holds

More tea was last week offloaded for sale at the Mombasa auction following a price rally that has so far lasted a month.

Market report by the East Africa Tea Trade Association (Eatta) indicates sellers released more stocks of the beverage as the price hit an average of Sh221 for a kilo of made tea.

Out of 9,200,000 kilos that were available for sale during the weekly trading, 8,268,017 kilos were sold, with just 10 percent of the offer going unsold.

The prices at the auction defied an increase in supply of the commodity offered for sale to record an increase in value.

“This week’s average price increased to Sh221 when compared with last week’s auction of Sh220. The total volume traded was 156,766 kilos more than last week,” says the report.

Tea prices have been significantly low in the last two months hitting a low of Sh176 at one point, a move that saw sellers withdraw their commodity from the auction because of the low earnings.

Kenya Tea Development Agency has already warned farmers of depressed prices this year following low prices that have been recorded over the period.

Small-scale tea holders earned a record gross payment of Sh85.74 billion last year riding on a bumper harvest in the past season that defied the fall in global market prices, marking the third year of improved earnings. But the earnings have since fallen significantly causing a major uproar in growing zones.

At Sh85.74 billion, Kenya’s tea earnings were up 9.4 percent compared to the previous season’s total income of Sh78.31 billion, according to the agency.

The rally in price has been attributed to the easing tension in some of the leading markets such as Sudan and Egypt.

“The prices have been improving in the last couple of weeks and it is because of favourable conditions that we are witnessing in our major markets,” said Eatta chairman Gideon Mugo.