Tea prices drop to 14-week low at auction as slide continues

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Commodities

Tea prices drop to 14-week low at auction as slide continues


tea

Limuru Tea owns 282 acres of tea plantations in Limuru, Kiambu County. FILE PHOTO | NMG

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Summary

  • Data from the East Africa Tea Traders Association (Eatta) indicates that the price of tea dropped to Sh199 last week from Sh204 initially.
  • The decline in cost saw 17.4 per cent of the total teas brought at the auction withdrawn by traders because of low prices, marking the second highest volumes to be taken out of trading since the beginning of the year.

Tea prices at the Mombasa auction declined to a 14-week low in the latest sale, marking the fourth time in a row that the value of the commodity has dipped.

Data from the East Africa Tea Traders Association (Eatta) indicates that the price of tea dropped to Sh199 last week from Sh204 initially.

The decline in cost saw 17.4 per cent of the total teas brought at the auction withdrawn by traders because of low prices, marking the second highest volumes to be taken out of trading since the beginning of the year.

The price of the commodity at the auction had last month touched the two dollar mark for the first time in in 18 weeks, before the value started falling in subsequent sales.

“Sale 13 average price decreased to Sh199 ($1.83) when compared to Sale 12’s Sh204 ($1.88),” said a market report from Eata.

Compared with the corresponding period last year, the price of the beverage is still lower. In the 13th sale of 2020, the commodity fetched Sh209.

Kenya’s tea is still facing demand challenge in the world market as the effects of Covid-19 are still taking a toll on Kenya’s beverage.

The lower prices have also been attributed to an increase in volumes in the world market. Kenya is the leading country in exports of the commodity with over 95 per cent of the total tea produced locally shipped outside the country.

Tea production was up 24 per cent in 2020 to hit 569 million kilogrammes from 468 million kilogrammes in corresponding period in 2019.

Tea exports to Kenya’s major markets increased by four percent to 518 million kilos when compared with 496 million in the same period in 2019.

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