Counties

Mombasa tea sale records third best price globally

Mombasa Tea Auction in session. FILE PHOTO | NMG
Mombasa Tea Auction in session. FILE PHOTO | NMG 

Mombasa auction, the second largest black CTC tea market in the world, recorded the third best price in 2017 per kilogramme of the beverage globally to register one of the sterling performances.

At Sh306 per kilo, the auction came third after Sri-Lanka and Rwanda, which offered its farmers Sh414 and Sh311 respectively for the same quantity.

Rwanda’s tea has been edging out Kenya’s produce on high quality, leading to increased demand for the former at the auction.

However, the volumes offered for sale at the trading from Kigali is just a fraction of what Kenya produces, giving it advantage. 

The high price helped to lift Kenya farmers’ earnings to Sh129 billion last year, from Sh120 previously. This is the highest in the last five years, according to the tea directorate.

“Improved earnings last year is attributed to sustained demand of our tea in key and emerging markets, coupled with a stronger dollar in the period under review,” said Samuel Ogola, head of Tea Directorate.

Pakistan remained Kenya’s leading tea buyer, a position that it has held for over a decade now, followed by Egypt and United Kingdom.

Pakistan bought tea worthy Sh50 billion having purchased 153 million kilogrammes of the commodity at the auction in 2017, at a price of Sh332 per kilo. Egypt and UK made imports worth Sh70 billion and Sh38 billion respectively.

Kenya is the leading exporter of black CTC teas in the world accounting for about 24 per cent of the global exports.

Kenya’s major market for tea have remained the same over the years but the directorate is trying to open up new ones as it seeks to cut overreliance on these traditional buyers.

The directorate is also banking on emerging markets such as Indonesia, Japan, Ukraine, Belgium, Sri Lanka, China and Hong Kong to boost earnings.

The regulator is also pushing for increased local consumption to boost sales. Last year, local consumption of tea increased from 29.7 million kilos to 37.6 million, accounting for Sh15 billion on local sales.

Over the years, local consumption has remained at a paltry five per cent with 95 per cent of total production destined to export market.

Farmers are also headed for a good year in the current financial year as the directorate projects a three per cent increase with the price expected to stabilise at Sh309 per kilo.

Export volumes stood at 415 million kilos in 2017, which was lower than 480 million kilos registered in the previous year.

The bulk of the money earnings came in from multinational firms and other private entities according to agriculture regulator.

Multinational contribute 30 per cent of the total teas that is traded at the auction with other private firms and farmers affiliated to Kenya Tea Development (KTDA) bringing in the balance.