Tea Prices Drop 12 Percent In The Last 7 Months

KEY POINTS
Russia has been the 5th-largest consumer of Kenya’s tea after the United Arab Emirates, United Kingdom, Egypt, and Pakistan.
The Tea Board of Kenya confirmed that there was a huge decline in Russia’s earnings in March, with the volumes sinking to 686,072 from 2.6 million kilos sold in a similar period last year.
KEY TAKEAWAYS
Last year Kenya exported tea valued at $503 million to Pakistan. According to the East African Tea Trade Association (EATTA), Pakistan is the biggest buyer at the Mombasa Tea Auction, taking up 38 percent of the total weekly sales.
Tea prices have continued to dwindle over the last couple of months following a low demand from buyers in the world markets.
A new market report by the East African Trade Association (EATA) shows that the prices of the beverage have dropped by more than 12 percent in the last 7 months, to a low of $2.22 (265.70 shillings) from $2.53 (302.80 shillings) recorded in the third week of February.
The Russia-Ukraine war, and changing weather patterns were named as the other key drivers of the price decline.
Since Russia invaded Ukraine in March, shipping of the beverage to the western nations was disrupted following the blockage of shipping routes. Moreover, many shipping companies are yet to resume business with Russia.
Russia has been the 5th-largest consumer of Kenya’s tea after the United Arab Emirates, United Kingdom, Egypt, and Pakistan. The Tea Board of Kenya confirmed that there was a huge decline in Russia’s earnings in March, with the volumes sinking to 686,072 from 2.6 million kilos sold in a similar period last year.
Low demand from various recipient countries has seen the volume of unsold tea increase to 27.4 percent last week from 14.75 percent recorded in February. During the period under review, the average price of the beverage decreased by $0.31.
Pakistan which is the top consumer of Kenya’s tea has also cut the consumption of Kenya’s tea citing financial uncertainties. According to industry data, Pakistan buys an average of up to 70 million kilograms of Kenyan tea annually.
Last year Kenya exported tea valued at $503 million to Pakistan. According to the East African Tea Trade Association (EATTA), Pakistan is the biggest buyer at the Mombasa Tea Auction, taking up 38 percent of the total weekly sales.
Tea is among Kenya’s leading exports and has been hailed for earning the country high revenue alongside the horticulture sector. This year Kenyan tea has managed to remain above two dollars per kilo as compared to last year when the prices ranged between $1.80 (Sh 215.28 ) and $1.90 (Sh 227.24 ).
“We are doing much better this year. This year we are relatively higher at above two dollars and at least the producers are able to meet their cost of production,” EATTA managing director Edward Madibo said.
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