Tea prices at the Mombasa auction reached a 23-week high last week, thanks to increased buyer demand and a drop in volume offered for sale.
According to the East African Tea Trade Association (Eatta), the price per kilogramme of the beverage increased to $2.32 (Sh280) from $2.27 (Sh274) in the previous sale, promising relief for farmers who have been facing low earnings following a string of poor prices in recent weeks.
Despite the improved price offers, 39 percent of tea offered for sale was withdrawn from the auction floor, up from 33 percent in the previous week’s sale, indicating that sellers are expecting the beverage’s price to rise further.
The volume of tea offered fell by more than 500,000 kilograms, marking the second consecutive decline in quantities.
“There was a fairly 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,” said Eatta in the market report.
During the sale, Pakistan Packers, Yemen, and other Middle Eastern countries provided strong support, with Afghanistan and Kazakhstan showing specific interest.
The lower prices were previously attributed to low demand for the commodity at the auction following Russia’s invasion of Ukraine in February, which disrupted the market.
According to the regulator, the Russian war on Ukraine reduced tea exports to the Asian country by more than Sh05 billion in the first quarter.
Farmers affiliated with Kenya Tea Development Agency Holdings saw their earnings increase 42.4 percent to Sh62.8 billion in the fiscal year ended June 2022, when commodity prices rose by double digits. The payout was the largest in five years.
The government’s introduction of a minimum tea price per kilogramme of $2.43 for KTDA stocks beginning in July last year aided the 26.6 percent price increase.
