Kenya - Tea Auction Prices Post Highest Six Month Mark - 26/06/2015

By Martin Mwita and appeared in the Kenya "the Star" on the 20th June.Ceylon - Tea Country (Picture courtesy of Jane Pettigrew)The original article can be seen here.

TEA prices at the weekly Mombasa auction have hit an average $3.01 (Sh294) per kilogramme, the highest mark this year.

This is a two per cent increase from last week's sale where the commodity traded for $2.95( Sh288) per kilo.

According to the East Africa Tea Trade Association, volumes traded this week also increased to 7.95 million kilos up from last week's 7.05 million kilos, an increase of 896,631 kilos (12.7 per cent).

The price increase has been attributed to high demand for tea by key markets.

According to the Africa Tea Brokers, there was a strong and much improved demand for the 132,269 packages offered at the auction, with prices appreciating with quality.

"The price has been driven by demand which coincidentally saw supply go up. This is unlike previous trends when the prices went up due to low supply and high demand," EATTA managing director Edward Mudibo told the Star on telephone.

The Pakistan market recorded a strong intake and remained dominant. There was also improved and strong activities from Egyptian and Afghanistan markets.

"There was much more interest from Yemen, other Middle Eastern countries, Bazaar, Kazakhstan, other CIS countries and Sudan. UK was more active but selective with some line buying from Russia but Iran remained subdued. Somalia showed more activity," read a report by Africa Tea Brokers.

"The demand of our teas usually goes up around this month and if things remain as they are, we are anticipating good and stable prices," said Mudibo.

This week's price also beats prices of the commodity in last year's first six months, where the highest recorded price was $2.65 (Sh259).

"This is the highest recorded average price this year. It is a record for the year," he said.

Meanwhile, tea traders have expressed disappointment over the government's failure to consider tax exemption for locally consumed tea in the budget.

The association wants local sales exempted from the 16 per cent Value Added Tax, to increase consumtion in the country. Only five per cent of Kenyan tea is consumed in the local market with the remaining 95 per cent exported.

Added: Friday, 26th June 2015