Tea prices at the Mombasa auction have risen to a 23-week high in last week’s sale. However, the demand is good from buyers amid a decline in the volume offered for sale.
According to the data from the East African Tea Trade Association (Eatta), the price per kilogramme of tea rose to $2.32 (Sh280) from $2.27 (Sh274) in the previous sale, which was a promising relief for farmers who have been staring at low earnings after a streak of poor prices in recent weeks.
Nonetheless, despite the improved price offers, 39 percent of tea offered for sale was withdrawn from the auction floor, up from 33 percent that was taken off the auction floor in last week’s sale.
This is a sign that sellers are anticipating a further rise in the price of the beverage.
The volume of tea offered dipped by over half a million kilogrammes, to mark the second time in a row that the quantities have been declining.
“There was a good demand following quality for the 189,420 packages (12.1 million kilogrammes) on offer. At least 111,460 packages (7.3 million kilogrammes) were sold,” Eatta noted in the market report.
Moreover, during the sale, Pakistan Packers, Yemen, and other Middle Eastern countries lent strong support, with selective interest from Afghanistan and Kazakhstan.
Furthermore, the falling prices had earlier been blamed on low demand for the commodity at the auction following the invasion of Ukraine by Russia in February, which disrupted the market.
According to the regulator, the Russian war on Ukraine cut tea exports to the Asian nation by over Sh5 billion in the first quarter.
In addition, farmers allied to the Kenya Tea Development Agency Holdings saw their earnings rise 42.4 percent to Sh62.8 billion in the year ended June 2022 when the price of the commodity rose by double digits.
The payout was the highest received in five years. The 26.6 percent price jump was helped by the government’s introduction of a minimum tea price per kilogramme of $2.43 for KTDA stocks starting July last year.
