Tea price rises slightly as glut persists at auction
Tea prices at Mombasa auction increased by a dollar but remained stuck within a three-year low as high volumes offered for sale continue to negatively impact the value.
A kilogramme fetched an average of Sh247 ($2.47) up from Sh246 ($2.46) in last week’s trading.
A market report from East African Tea Traders Association indicates the volume offered for sale this week increased by 707,203 kilogrammes.
“Out of 163,252 packages (10,690,000 kilos) available for sale, 148,952 (9,781,614 kilos) were sold with 8.75 per cent going unsold,” says the report.
The auction started at a high of Sh270 in the first sale of the year but has in the last three months been performing dismally.
Poor prices point to low earnings for farmers in the next financial year and poor pay for the second payment at the end of a calendar year.
Growers affiliated to Kenya Tea Development Agency earned Sh42 billion as second payment last year. This was lower by Sh2 billion compared with a record high of Sh44 billion they earned in 2016.
The bulk of the tea from the small-scale sub-sector is sold through the Mombasa auction, before it is exported overseas by buyers.
The country exports the bulk of its tea to Egypt, UK, Pakistan, Afghanistan, Iran, Sudan, Yemen and UAE.