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Tea prices remain stable as strong dollar earns farmers more

A kilo this week fetched Sh263.

In Summary

•Prices have averaged $2.30 (Sh273.36 ) since the beginning of the year, market data shows, compared to $1.80 (Sh213.93 ) last year.

•In February this year, the auction recorded a four-year high on prices driven by demand from key global markets.

A farmer picks tea leaves in Othaya, Nyeri county
A farmer picks tea leaves in Othaya, Nyeri county
Image: FILE/

 Tea prices at the Mombasa Auction have continued on a good run with the strong dollar against the shilling promising farmers more returns compared to last year.

This week’s auction recorded a price gain as a kilo fetched $2.22 (Sh263.85 ), up from $2.21 (Sh262.66 ) last week.

Prices have averaged $2.30 (Sh273.36 ) since the beginning of the year, market data shows, compared to $1.80 (Sh213.93 ) last year.

In February this year, the auction recorded a four-year high on prices driven by demand from key global markets.

A kilo averaged $2.65 (Sh314.95).

“Any price above two dollars is considered a good price,” East African Tea Trade Association (EATTA) managing director Edward Mudibo notes.

EATTA are the managers of the Mombasa Tea Auction, one of the largest in the world where teas from Kenya, Uganda, Rwanda, Tanzania, Malawi, Ethiopia and the Democratic Republic of Congo are traded.

The total volume traded this week was 150,380 kilos more than last week, where a total of 8.8 million kilos were traded compared to 8.6 in the previous sale.

According to EATTA, there was a general demand at irregular levels for the 180,695 packages (11,877,084.00 kilos) available for sale. 

132,937 packages (8,761,661 kilos) were sold with 26.43 per cent  of packages remaining unsold.

Egyptian Packers, Yemen, other Middle Eastern countries and Sudan maintained useful support with improved interest from Kazakhstan, other CIS states and UK while Pakistan Packers, Bazaar and Afghanistan showed reduced activity.

“Russia were less active with Iran absent. Local Packers maintained interest with Somalia active at the lower end of the market,” Mudibo notes in the weekly trading report.

Next week, a total of 183,875 packages (11,934,317 kilos) have been offered for sale which is an increase of 3,180 packages (57,233 kilos) when compared to this week.

The strong dollar against the shilling, which remained weak at 118.8 to a unit of a dollar on Friday, means more money in farmers’ pockets.

Tea remains a key foreign exchange earner for the country.

Last year, it was among the major exports where it accounted for 19.6 per cent of the total domestic exports earnings.

“Earnings from tea increased by 3.2 per cent from Sh122.2 billion in 2020 to Sh26.1 billion in 2021. The effect of higher prices offered for marketed tea outweighed the effect of lower quantities, resulting in higher earnings in the year under review,” the Economic Survey 2022, by the Kenya National Bureau of Statistics, states.

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