Tea Prices Hold Steady At Mombasa Auction After Poor Performance Streak

Tea prices at the weekly Mombasa auction continue to hold steadily, after a streak of poor performances in September and August.

The value of the beverage rose to Ksh286 per kilogram in the latest sale when compared with the previous trading where it fetched Ksh280.

The price increase, which was boosted by demand, comes on the back of a rise in the volume of tea, which was offered for sale during the session. The quantities were 120,000 kilograms more than the previous auction.

“There was a good demand for the 185,020 (12.3 million kilograms) on offer with 129,380 (8.6 million kilograms) were sold,” said East African Tea Trade Association.

The better returns saw the quantity of tea withdrawn from the auction floor fall to 29 percent from a high of 33 percent last week as producers released more produce to the market to benefit from the good offers.

Low prices in the last two months had caused restlessness in the industry as stakeholders distressed over declined earnings in the current financial year after the price of tea remained low for an extended period.

Lower earnings were attributed to a decline in demand from buyers owing to the economic woes in Pakistan and the Russia-Ukraine war that resulted in logistical challenges.

Pakistan being the top buyer of Kenya’s tea accounting for nearly 40 percent of the total produce sold at the sale. Pakistan has been in financial turmoil for some time, with the government restricting imports to stabilize its economy.

The Russian invasion of Ukraine in late February drastically cut the supply of the beverage to Moscow, which is Kenya’s 5th largest buyer.

The low absorption of tea by the leading buyers meant that huge volumes of tea were not being offloaded from the auction, resulting in a high supply at the market.

This marks the fourth week in a row that the price of the beverage has taken an upward trend at the sale.