Tea prices rebound at Mombasa weekly auction - Beaking Kenya News

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Saturday, 21 November 2020

Tea prices rebound at Mombasa weekly auction

 

A kilo of tea traded at $1.93 (Sh211.14) at this week's auction, gaining marginally from last week amid a drop in volumes traded.

The commodity had last week fetched $1.90 (Sh2017.86) which was a drop from the previous week's $1.92 (Sh210.05) a kilo price.

This week's rebound signals better returns for farmers whose final earnings are determined by the price margins at the weekly tea auction in Mombasa.

The total volume traded this week was 163,604 kilos less than last week where total volumes closed at 8.2 million, compared to 8.4 million last week.

Out of 150,652 packages (9,976,447 kilos) available for sale, 124,670 packages (8,235,418) were sold. 17.25 per cent packages remained unsold, the East African Tea Trade Association (EATTA) notes in its market report.

“Pakistan Packers showed strong support while Bazaar lent more and very strong interest with increased enquiry from Kazakhstan, other CIS nations and Sudan,”the association’s managing director Edward Mudibo says in the report.

There was more and improved activity from Afghanistan while Egyptian Packers, UK and Russia were active with Yemen and other Middle Eastern countries active but at lower levels, he adds.

“Iran were selective but there was more interest from Local Packers in line with price. Somalia were active at the lower end of the market,” Mudibo said.

Tea prices have continued to trade below the 2-dollar mark for the eleventh straight week , signaling low earnings for farmers compared to last year.

This week's price is however lower compared to a smililar sale last year, when the commodity fetched $2.23 (Sh243.96) a kilo.

Average prices have remained below the two-dollar mark (Sh218) for the last 12 straight weeks.

In a similar period last year, a kilo of tea averaged $2.14 (Sh243.12), which hugely contributed to the Sh51.85 billion paid in bonuses to farmers this year, for the year ended June 2020, up from Sh46.48 billion last year.

The highest price this year remains the $2.23 (Sh243.96) the commodity opened the year with (first sale of 2020).

The strong dollar against the shilling however comes as a blessing for farmers as it puts the earnings at a higher mark, with the commodity trading on the US currency.

EATTA auction prices will go back to above the two-dollar mark in the near future.

“Anything below two dollars is not good,”Mudibo told the Star.

Pakistan is the leading export destination for Kenyan tea.

Low prices witnessed this year have been pegged on over-production and supply of green leaf in the wake of favorable weather conditions, with a depressed export market affecting buying decisions.

On the onset of the Covid-19 pandemic, buyers also stocked their warehouses for fear of a supply cut, EATTA notes, a move that slowed buying of new stocks, hence the low price margins.

This comes amid a rise in production which according to the Kenya Tea Development Agency (KTDA) Holdings , green leaf production by its affiliate factories grew by 28.5 per cent for the year ended June 30, 2020.

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