Tea prices remain below 2-dollar mark for eleventh week

A kilo at this week's auction averaged $1.90(Sh207.50).

In Summary

•In a similar sale last year, a kilo averaged $2.25 (245.72).

•Auction prices determine farmers’ final earnings.

A tea estate in Bomet owned by a multinational company/
A tea estate in Bomet owned by a multinational company/
Image: Felix Kipkemoi

Tea prices have continued to trade below the 2-dollar mark for the eleventh straight week , signaling low earnings for farmers compared to last year.

A kilo at this week's auction averaged $1.90(Sh207.50) down from last week's $1.92(Sh209.68).

This, as volume traded increased to 8.3 million kilos compared to 8.2 million kilos traded last week.

In a similar sale last year, a kilo averaged $2.25 (245.72).

The highest price this year remains the $2.23 (Sh243.54) the commodity opened the year with (first sale of 2020).

Pakistan Packers and Egyptian Packers showed strong inquiry this week but at lower levels with UK, Russia and Bazaar active while Kazakhstan and other CIS states showed irregular interest, the East African Tea Trade Association (EATTA) says in its market report.

“There was reduced activity from Yemen and other Middle Eastern countries while Sudan were active but selective with Iran selective,”the association’s managing director Edward Mudibo notes in the weekly report.

Afghanistan showed less interest and Iran were selective.

“Local Packers bought tea on account of price. Somalia were active at the lower end of the market,” Mudibo notes.

The total volume traded this week was 195,173 kilos more than last week.


Out of 150,320 packages (9,906,674 kilos) available for sale, 127,820 packages (8,399,022)were sold. 14.97 per cent packages remained unsold.

This week's price however remains high compared to the lowest average of $1.73 (Sh188.93 ) the commodity hit this year, the lowest to date.

The strong dollar against the shilling is also a blessing for farmers as it puts the earnings at a higher mark, with the commodity trading on the US currency.

EATTA is hoping the commodity will go back to above the two-dollar mark in the short-tern where according to Mudibo, “anything below two dollars is not good.”

Pakistan is the leading export destination for Kenyan tea.

Low prices witnessed this year have been pegged on over-production and supply of green leaf in the wake of favorable weather conditions, with a depressed export market affecting buying 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 slowed buying of new stocks, hence the low price margins.

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.

Auction prices determine farmers’ final earnings.

The 54 tea factory companies managed by the KTDA last month released Sh27.62 billion, being the final payment, popularly known as “bonus”, to tea farmers.

This is for the Financial Year ended June 30, 2020.

It took the total payment for the year to Sh51.85 billion; up from Sh46.48 billion last year.