MARKET

Tea auction prices drop to below two dollars

A kilo this week fetched $1.98 on average.

In Summary

•It had picked to above two dollars a kilo in the previous two weeks after averaging $1.70 (Sh186.75) for the better part of the first half.

•It averaged $2.01(Sh220.80) last week.

Packaged tea for export at warehouses in Shimanzi, Mombasa/FILE
Packaged tea for export at warehouses in Shimanzi, Mombasa/FILE

 Tea prices slightly dropped to below the preferred two-dollar mark at this week’s auction, as the commodity continues to register mixed performance this year.

It had picked to above two dollars a kilo in the previous two weeks after averaging $1.70 (Sh186.75) for the better part of the first half.

This week, a kilo averaged $1.98 (Sh217.50), dropping from an average $2.01(Sh220.80) last week.

Any price below too dollars “is not good” according to market managers–East African Tea Trade Association (EATTA).

The cash crop has fetched a price of $2 (Sh219) only thrice this year, signaling low earnings for farmers who are however likely to ne cushioned by a strong dollar against the shilling.

Auction prices at the Tea Trade Centre in Mombasa touched a historic low of $1.55 (Sh170.27 ) in July,prompting the government to set a minimum price to cushion farmers.

The minimum reserve price for Kenyan processed tea at the Mombasa auction is set at Sh183 ($1.67).

This week, the total volume traded was 530,456.00 kilos less than last week.

“There was a good but irregular demand for the 128,659 packages (8,382,107.50 kilos) on offer closely following quality with 88,960 packages (5,719,925 Kilos) being sold. 30.86 per cent packages remained unsold,” EATTA notes in its weekly report.

Kazakhstan, other CIS states and Sudan lent more and strong support while Egyptian Packers, Bazaar, Yemen and other Middle Eastern countries were active, it says.

Pakistan, which consumes about 40 per cent of Kenyan tea exports,reduced interest while UK were active but selective with less activity from Russia.

“ There were some purchases from Iran with Afghanistan quiet. Local Packers showed good interest in line with price. Somalia lent good support at the lower end of the market,” EATTA managing director Edward Mudibo said.