Tea prices at the weekly Mombasa auction have dropped to a 14-month low, pushed by reduced demand from key global markets.
This includes Russia, which takes up five per cent of the total teas sold through the auction.
This week, a kilo fetched $2.30 (Sh262.50) down from $2.46 (Sh280.76) last week.
The commodity’s price has dropped for a fifth straight week after hitting a four-year high in the first week of February, when it fetched $2.62 (Sh299.02).
Both prices and volumes dropped this week, East African Tea Trade Association (EATTA) data shows, where volumes traded reduced to 10 million kilogrammes from 10.5 million last week.
“It is a factor of market supply and demand. There is no uptake from Russia which has affected the auction something expected to play out for sometime,” EATTA managing director Edward Mudibo told the Star.
Of the 13.2 million kilos availed for sale, 153,330 packages (10,029,155 Kilos) were sold with prices closely following quality. 25.01 per cent of packages remained unsold, EATTA notes.
Pakistan Packers lent good support but at lower levels with improved activity from Sudan while Egyptian Packers maintained enquiry, the association says in its report.
UK, Yemen and other Middle Eastern countries were active but at lower levels, with less enquiry from Bazaar while Kazakhstan and other CIS states showed reduced interest.
“Russia, Afghanistan and Iran were quiet. Local Packers bought teas in line with the price. Somalia maintained activity at the lower end of the market,” the report states.
A strong dollar against the shilling is however a relief for farmers as it cushions them from low auction prices.
