Tea prices hit 23-week high on lower volumes, rising demand – Business Daily
Farmers pick tea on a farm in Kiangondu village in Tharaka-Nithi County. PHOTO | ALEX NJERU | NMG
Tea prices at the Mombasa auction rose to a 23-week high in last week’s sale on the back of better demand from buyers amid a decline in volume offered for sale.
Data from the East African Tea Trade Association (Eatta) shows that the price per kilogramme of the beverage rose to $2.32 (Sh280) from $2.27 (Sh274) in the previous sale, promising relief for farmers who have been staring at low earnings after a streak of poor prices in recent weeks.
However, despite the improved price offers, 39 percent of tea offered for sale was withdrawn from the auction floor, up from 33 percent that was taken off the auction floor in the last week’s sale, signalling that sellers are anticipating a further rise in the price of the beverage.
The volume of tea offered dipped by over half a million kilogrammes, to mark a second time in a row that the quantities have been declining.
“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 lent strong support, with selective interest from Afghanistan and Kazakhstan.
The falling prices had earlier been attributed to low demand for the commodity at the auction following the invasion of Ukraine by Russia in February, which disrupted the market.
The Russian war on Ukraine cut tea exports to the Asian nation by over Sh05 billion in the first quarter, according to the regulator.
Farmers allied to the Kenya Tea Development Agency Holdings saw their earnings rise 42.4 percent to Sh62.8 billion in the year ended June 2022 when the price of the commodity rose by double digits. The payout was the highest received in five years.
The 26.6 percent price jump was helped by the government’s introduction of a minimum tea price per kilogramme of $2.43 for KTDA stocks starting July last year.
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