Tea prices have retained a stable at the weekly Mombasa auction for the second week running, despite being below the two-dollar mark.
A kilo this week averaged $1.94 (Sh213.40) same as last week even as volumes traded increased.
Data by the East African Tea Trade Association (EATTA), which manages the auction, shows the total volume traded for this week was 482,988 kilos more than last week.
Out of 169,180 packages (11,226,497 kilos) available for sale, 147,740 packages (9,653,934 kilos) were sold. 12.67 per cent packages remained unsold,EATTA notes.
“Kazakhstan and other CIS states lent strong support and were forceful with increased and strong enquiry from Pakistan Packers,”EATTA managing director Edward Mudibo said.
EATTA also notes there was more and strong interest from Sudan, UK and Bazaar while has also repYemen and other Middle Eastern countries lent more activity with reduced support from Egyptian Packers.
Russia was active while Afghanistan showed selective interest with some activity from Local Packers on account of price; Iran were selective. Somalia was active at the lower end of the market.
The export commodity has started the year with good average prices after fetching lower prices for the better part of last year, signaling good returns for farmers this year.
It closed last year at $1.87 (Sh205.70), on average, while 2020 full-year average price was $1.80 (Sh198).
This was about six per cent down compared to the previous year, as high production and a depressed market occasioned by Covid-19 affected demand.
In 2019, it fetched an average $2.05 (Sh225.50 )at the Mombasa weekly auction, with above the two-dollars a kilo being the preferred price mark.
Farmer's earnings were however cushioned by a stronger dollar to the Kenyan Shilling as the commodity trades on the US currency, with the shilling hitting a historic low of an average 111.1 units to the US dollar in December.
It exchanged at 110.1 on Friday.
This year's prices will be highly driven by climatic conditions and demand in core markets of Pakistan which takes up 38 per cent of Kenya's tea exports, Egypt, the UK and Sudan, Mudibo notes.
Over supply of the commodity, in case of favourable weather, will however affect prices in case of low demand.
“We are however optimistic prices on average will be better than what we saw last year,” Mudibo told the Star in a telephone interview, with optimism the average price will go above two dollars in the near future.
Last year, there was over-production and oversupply of green leaf in the wake of favourable weather conditions, with a depressed export market affecting buying decisions.
Kenya Tea Development Agency Holdings announced green leaf production by its affiliate factories grew by 28.5 per cent for the year ended June 30, 2020.
On the onset of the Covid-19 pandemic, buyers also stocked their warehouses for fear of a supply cut, a move that slowed buying of new stocks, hence the low price margins witnessed in the year.
