Tea prices at Mombasa auction remain stable.
Tuesday October 25, 2022
Tea prices at the weekly auction in Mombasa have remained stable. After a bad performance in September and August
The value of the drink increased to $2.37 per kg (Sh286) in the latest sale. Compared to the previous trade which was $2.32 (Sh280)
This is the fourth week in a row that the drink’s price has been trending higher on sale.
The price increase was driven by demand. This is a result of the increased volume of tea being offered for sale during the session. The volume is more than the previous auction by 120,000 kg.
“There is great demand for 185,020 (12.3 million kg) proposals with 129,380 (8.6 million kg) sales,” the East African Tea Trade Association said.
Improved yields saw volumes of tea withdrawn from the auction grounds drop to 29 percent from a peak of 33 percent last week. As manufacturers release more products to the market to benefit from good deals.
Low prices in the past two months have caused industry jitters as stakeholders worry about lower revenues in the current financial year after tea prices have remained low for an extended period of time.
The drop in revenue was a result of lower demand from buyers due to economic problems in Pakistan and the Russo-Ukraine war, which resulted in logistical challenges.
Pakistan is Kenya’s largest tea buyer, accounting for nearly 40 percent of all produce sold on sale.
Pakistan has been in financial trouble for some time. The government has restricted imports to stabilize the economy.
Russian invasion of Ukraine at the end of February This caused a sharp drop in drink supply to Moscow. which is Kenya’s 5th largest buyer
Top buyers with low tea bioavailability means that many teas are not excluded from the auction. As a result, there is a high supply in the market.
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