Kenyan Tea Farmers to Benefit from Increased Prices

Tea prices are reported to have risen by 5.6 percent at the latest sale, hitting a three-year high. This is seen from the price of the beverage at the Mombasa auction was 318 shillings per kilogram during this week’s trading, up from 301 shillings last week.

The increase is said to be as a result of the good performance that the beverage has continued to enjoy since the beginning of the year.

Edward Mudibo, the managing director of East African Tea Traders Association (EATTA), said the price is expected to maintain the same trend in coming weeks.

“The price of tea at the auction continues to register good performance since the beginning of the year and we expect the same trend to continue in the coming sales,” said Mr. Mudibo.

He noted that there has been an increase in demand as buyers scramble to secure future stocks in the wake of rising prices occasioned by fears of a looming shortage which could push the price farther up.

“Traders want to get enough stocks at the lowest price before it goes up due to an anticipated shortage,” he said. Last week EATTA projected that the price of the beverage would cross the 300 shillings’ mark.

According to small scale farmer marketing agency Kenya Tea Development Agency (KTDA), production of the commodity in the country decreased by 30 percent in the last five months due to the prolonged dry spell. The current drought is expected to cut tea production by 12 percent to 416 million kilograms from 473 million registered in 2016.

Consequently, export volumes are expected to drop by the same margin to reach 422 million kilos while export earnings are projected to hit a record high of 133 billion shillings in 2017.

The Kenya Meteorological department said that the ongoing drought may persist until April, a fact that is likely to cut production and raise demand for tea hence impacting positively on the price.

Kenya is the leading exporter of the beverage, selling 95 percent of its tea in the global market. The country is trying to open up new markets and expand the existing ones such as China, which has potential to buy more of the local beverage.

Related: India to Help Boost Kenya’s Agricultural Sector