Ksh 1.2 Billion Tea Withdrawn At The Weekly Auction

By Jane Muia / Published October 31, 2022 | 1:51 pm

KEY POINTS

There was an improved general demand for the 194,376 packages (13 million kilos) on offer at irregular levels following quality. 133,380 packages (8.8 million kilos) were sold with 31.38 percent of the packages remaining unsold

KEY TAKEAWAYS

A kilogram of the beverage fetched a good price of $2.42 (293 shillings), helped by the government-backed minimum price. The volume of tea at the auction was more by 243,000 kilograms when compared with the previous sale.

Tea worth at least 1.2 billion shillings was withdrawn at the Mombasa auction in the latest sale as producers anticipate better earnings in the next sale. According to data from the East African Tea Trade Association (EATTA), this was 31 percent of the total tea offered for sale.

During the sale, a kilogram of the beverage fetched a good price of $2.42 (293 shillings), helped by the government-backed minimum price. The volume of tea at the auction was more by 243,000 kilograms when compared with the previous sale.

“There was an improved general demand for the 194,376 packages (13 million kilos) on offer at irregular levels following quality. 133,380 packages (8.8 million kilos) were sold with 31.38 percent of the packages remaining unsold,” said Eatta.

The price of tea at the auction has been on an upward trend for the last 2 months compared to the period between July and August a move that signaled low earnings to growers in the current financial year.

According to EATA the prices of the beverage dropped by more than 12 percent in the 7 months to August to a low of $2.22 (265.70 shillings) from $2.53 (302.80 shillings) recorded in the third week of February.

The low earnings were primarily attributed to the Russia-Ukraine war and low demands from Key markets such as Pakistan. Pakistan is the top buyer of Kenya’s tea taking up 38 percent of the total weekly sales at the Mombasa Tea Auction. The country has since June cut its tea consumption citing financial uncertainties.

The country’s foreign exchange reserves dropped from around $16 billion (1.9 trillion shillings) in February, to less than $10 billion (1.2 trillion shillings) in the first week of June. The South Asian country has also witnessed extreme weather conditions since the start of the year, with recent floods leaving a third of the country underwater and leading to a humanitarian crisis.

This year Kenyan tea has however managed to remain above two dollars per kilo as compared to last year when the prices ranged between $1.80 (215.28 shillings) and $1.90 (227.24 shillings).