Tea Prices Surpasses the $2.43 Mark as Demand Stabilize

Tea Prices Surpasses the $2.43 Mark as Demand Stabilizes

By Jane Muia / Published November 9, 2022 | 10:17 am

KEY POINTS

“There was good demand but at irregular levels with prices following quality for the 197,500 packages (13.2 million kilograms) available for sale. 139,740 packages (9.3 million kilos) were sold with 29.25 percent of packages remaining unsold”, said Eatta.

KEY TAKEAWAYS

Pakistan Packers, Bazaar, and Afghanistan showed strong support with more interest from Egyptian Packers, Yemen, other Middle Eastern countries, Kazakhstan, and other CIS states.

Russia maintained inquiry with Local Packers active on account of price while Somalia maintained activity at the lower end of the market.

Tea prices at the weekly Mombasa auction have for the first time in 8 months surpassed the government-set minimum price of $2.43 as demand stabilize.

Data from the East African Tea Trade Association (Eatta) shows a kilo of the beverage fetched $2.46 in the latest sale up from the $2.42 recorded in the previous sale owing to good demand from buyers. The good demand saw the volume of tea withdrawn from the auction decline to 29 percent from the 31 percent recorded in the previous sale.

Pakistan Packers, Bazaar, and Afghanistan showed strong support with more interest from Egyptian Packers, Yemen, other Middle Eastern countries, Kazakhstan, and other CIS states. Russia maintained inquiry with Local Packers active on account of price while Somalia maintained activity at the lower end of the market.

Tea prices at the auction have for the last two months recorded impressive performance with farmers hopeful for better earnings in the current financial year. In the seven months to July, the sector’s earnings grew to 80 billion shillings when compared with the 71 billion shillings recorded in the corresponding period last year.

This was helped by the government-backed minimum price of $2.43 (291 shillings) per kilogram which protected their revenue as well as good demand from buyers and a high exchange rate against the shilling.

Kenya Tea Development Agency (KTDA) accounts for at least 85 percent of the total tea that is sold through the Mombasa auction. The Agency projects an increase in earnings in the remainder of the year, as it continues with efforts to improve operational efficiencies.

These include investment in small hydropower stations for cheaper power supply, diversification to orthodox teas to reduce reliance on Black crush, tear, curl (CTC) teas, and training of farmers on income diversification and management.