COMMODITY

Tea prices hit five year high

The tea sub-sector plays a strategic role in the socio-economic development of the country

In Summary
  • A kilo of tea leaf sold at a high of $2.31(Sh256.29) during the week, up from $2.26(Sh250.75) in the other week.
  • The good price at the auction saw the volume of tea traded increase by 816,109kg.

Tea prices rallied to a five-year high at the Mombasa auction last week as key export markets sustained demand for the commodity.

A kilo of tea leaf sold at a high of $2.31(Sh256.29) during the week, up from $2.26(Sh250.75) in the other week.

The good price at the auction saw the volume of tea traded increase by 816,109kg.

It also saw the volume of tea withdrawn from the trading floor fall to 19 per cent from 24 per cent in the previous sale.

“There was a good general demand for 133,723 packages (8.7 million kg) available for sale with 107,205 packages (7 million kg) being sold,” said East African Tea Traders Association (Eatta).

In the week, Pakistan Packers were dominant and lent strong and forceful support while Yemen, other Middle Eastern countries, Egyptian Packers and Bazaar showed more and strong enquiry.

Kazakhstan, other CIS nations, UK and Russia were active with reduced activity from Sudan.

Iran were quieter while Afghanistan were subdued with less interest from Local Packers in line with price.Somalia lent good support at the lower end of the market.

Pakistan which absorbs about 40 per cent of all tea exports from Kenya recently agreed to remove ’Attestation Fee’ that was charged by the Pakistan High Commission in Nairobi, a move that has made Kenyan tea competitive in the export market.

The prices at the auction have been going up for the last three months as the minimum price set by government continues to have a positive impact on earnings.

The tea directorate had projected that the price of the beverage will continue rising in future sales as the sector regulator forecasts a decline in production, which will cut down on supplies, hence increasing demand.

According to Agriculture CS Peter Munya, the tea sub-sector plays a strategic role in the socio-economic development of the country by supporting over six million Kenyans directly and indirectly.

It generates over Sh130 billion annually in export earnings.