COMMODITY TRADING

Tea prices drop for second consecutive week

However remained above the preferred 2-dollar mark.

In Summary

•A kilo this week averaged $2.53 (Sh287.53).

•Highest price remains $2.65 (Sh301.17), a four-year high recorded two weeks ago.

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

Tea prices at the weekly Mombasa auction dropped for a second consecutive week but remain above the preferred two-dollar mark.

A kilo this week averaged $2.53 (Sh287.53), market data by the East African Tea Trade Association (EATTA) shows, down form $2.58 (Sh293.22) last week, and a four-year high of $2.65 (Sh301.17) the two weeks ago.

This was the highest so far this year having opened the auction at $2.45 (Sh278.44) at the start of January.

This year’s performance however remains higher compared to last year where within the first seven weeks of market activities, the commodity had not fetched a price of two dollars.

It averaged $1.98 (Sh225.03) in a similar sale last year, meaning this year is promising farmers better returns on the back of a strong dollar to the Kenyan shilling.

Farmers attached to Kenya Tea Development Agency (KTDA) are expecting their mini-bonus in the first week of March, with factories making major decisions next week.

This week, there was a fair demand for the 192,040 packages (12,481,740 kilos) for sale with 161,400 packages (10,562,662 Kilos) being sold. 15.96% of packages remained unsold, EATTA notes. 

“Pakistan Packers lent good support with Egyptian Packers active but at lower levels while enquiry from Yemen and other Middle Eastern countries improved as the sale progressed. Bazaar and Sudan showed more interest with maintained activity from Russia while Kazakhstan and other CIS nations were active at lower levels,” EATTA managing director Edward Mudibo said.  

UK lent selective support while Afghanistan and Iran were quiet with Local Packers active on price. Somalia lent strong interest at the lower end of the market.  

Tea prices at the auction have remained stable since mid-last year with the introduction of a reserve price, of $2.43, ensuring they don’t drop below the preferred two dollars a kilo.

In the first half of 2021, the commodity had averaged $1.l8 (Sh 134.11 ) a kilo before the government intervened.

Pakistan remains Kenya’s biggest export market absorbing about 40 per cent of all teas from the country.

In 2020, Kenya earned about Sh25.9 billion of the total $589.8 million (Sh67.03 billion) worth of teas Pakistan imported from across the world.

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