Influx of tea from multinationals and an upsurge in farm production have pushed down the price of the commodity at the auction to a seven-month low.
A kilogramme (kg) on average traded at Sh268 in the last auction down from previous Sh273, marking the lowest price registered in recent months.
The Tea directorate says there has been a significant growth in volumes after a strike paralysed activity at multinational firms.
The industrial action was called off at the end of October.
“Tea from the multinational firms is now getting to the auction raising the quantities available for sale, hence pushing down the price,” said the directorate.
Market report from the East African Tea Traders Association (EATTA) indicates the volume offered at the auction was more by 272,761 kgs compared with the previous trading.
“Out of 172,760 packages (11,210,000kg) available for sale, 156,600 packages (10,148,593kg) were sold with 9.35 per cent packages remained unsold,” says the EATTA.
The directorate is optimistic the prices will go up again in January following the dry weather being witnessed in most parts of the country.
“The rains have stopped and if the current weather condition remains up to January, then there is a likelihood of prices going up again resulting from the shortage,” said the directorate.
Tea volumes have been on the rise following favourable weather that has seen production rebound after a sharp decline in the first quarter of the year that saw green leaf on the farms decline by almost half.
Workers at the multinational firms went on strike in October to demand for a 30 per cent increase awarded by the court in 2014, cutting the supply of tea to the auction.
These firms account for 30 per cent of the total volumes at the regional weekly trading.
The strike saw the companies suffer losses of close to a billion shilling following a three-week strike that paralysed production and curtailed the sale of tea.
It was estimated the firms lost four million kilogrammes in production as a result of the industrial action by employees seeking implementation of the award.