Market News

Tea prices touch three-month low at auction

Tea traders at the Mombasa auction. FILE PHOTO | NMG
Tea traders at the Mombasa auction. FILE PHOTO | NMG 

Tea prices at the Mombasa auction declined for the fourth straight session to touch a three-month low in the latest sale despite fall in volumes.

A market report by East African Tea Traders Association (EATTA) shows on average a kilogramme fetched Sh283 this week down from Sh292 in the previous week’s sale.

The price of the commodity has been dipping since the beginning of last month.

The volume of tea at the auction this week dropped to 6.6 million kilogrammes from 7.1 million the previous sale.

“Out of 116,248 packages (7,530,000 kilos) available for sale, 102,903 packages (6,673,854 kilos) were sold with 11.48 per cent packages going unsold,” said the EATTA in the report.

The price of the commodity had hit a high of Sh300 in June, marking the second time it crossed the mark since the beginning of the year.

Tea production for 2017 is, however, still expected to drop by double digits due to the effects of drought that affected production in most growing regions.

The Agriculture and Food Authority said production of green leaf will drop from 473 million kilogrammes in 2016 to about 420 million kilogrammes this year.

The beverage earned Kenya $1.226 billion (Sh127.3 billion) last year, which was a drop of 1.7 per cent from the $1.247 billion (Sh129.4 billion) the commodity recorded in 2015.

Kenya is the leading producer of black tea.