•A kilo at the Mombasa auction averaged $1.85 (Sh199.87) this week, a slight increase from $1.82(Sh196.63) in last week's trading.
•The commodity however continues to trade below the two-dollar mark for 13 weeks.
Image: FILE
Tea auction prices have shown a sign of recovery after maintaining an upward trend for the second week, despite remaining below the traditional two-dollar mark.
A kilo at the Mombasa auction averaged $1.85 (Sh199.87) this week, a slight increase from $1.82(Sh196.63) in last week's trading.
Out of 171,065 packages (11,363,081 kilos) available for sale this week,140,022 packages (9,268,419 kgs) were sold.
18.15 per cent packages remained unsold.
Kazakhstan and other CIS states lent strong support and were dominant while Sudan showed strong activity with increased interest from Pakistan packers, Yemen, other Middle Eastern countries and Russia, the East African Tea Trade Association (EATTA) data indicates.
“Afghanistan showed strong support with useful inquiry from Bazaar and UK. There was reduced interest from Egyptian packers while Iran were selective with strong activity from local packers,” EATTA managing director Edward Mudibo said.
Somalia were more active at the lower end on the market.
Last week, Kazakhstan, other CIS states and Sudan showed more and strong interest and were forceful while Afghanistan and Bazaar increased activity and were also forceful, according to EATTA.
Out of 176,602 packages (11,716,349 kilos) available for sale last week,139,925 packages (9,246,702 kgs) were sold, meaning this weeks sold packages went high.
20.77 per cent packages remained unsold last week.
The upward trend comes as a relief after three straight weeks of trading at an average $1.73 (Sh186.91), with price depreciation meaning low earnings for farmers.
EATTA is hoping the commodity will go back to above the two-dollar mark in the next few weeks.
It has traded below two dollars for 13 consecutive weeks.
“Anything below two dollars is not good but we are confident the prices will improve soon,” Mudibo told the Star, even as he noted that some grades are fetching good prices.
Low prices have been pegged on over-production and supply of green leaf in the wake of favourable weather conditions, with depressed export market affecting buyer decisions.
On the onset of the Covid-19 pandemic, buyers also stocked their warehouses for fear of a supply cut, EATTA notes, a move that has slowed buying of new stocks, hence the low price margins.
Last month, the Kenya Tea Development Agency (KTDA) Holdings announced green leaf production by its affiliate factories grew by 28.5 per cent for the year ended June 30, 2020.
This is a record high total production of 1.448 billion kilograms, up from 1.127 billion kilos the previous year.
The growth is attributed to continued favourable weather across tea-growing regions, improved crop husbandry practices among tea farmers and resumption of crop by farmers who had moved to privately owned tea factories.
“This growth came amid a tumultuous second half of the year that saw global tea prices plummet on the back of product oversupply in the market as well as disruptions occasioned by the Covid-19 pandemic,” it said in a statement yesterday.
The commodity opened the year at $2.18 (Sh235.53) per kilo before plummeting in May due to the impact of Covid-19.