Tea prices increase for fourth sale week in row

Tea prices at the Mombasa auction last week rose for the fourth sale in a row, offering hope for better pay for farmers following depressed prices in recent months.

A market report from the East African Tea Traders Association (Eatta) showed a kilo of tea traded at Sh203 on average from Sh197 in the previous sale.

The volumes of tea withdrawn from the market remained high though at 23 percent. Eatta said 2.5 million kilos of the beverage was taken out of the trading floor.

Last week’s trading recorded a decline in volumes from 9.2 million kilos previously to eight million in the latest sale. The recent decline in prices had been attributed to increased volumes of green leaf from farmers, which shot up in recent months.

Tea production in the first half of this year grew by 41 percent on the back of good weather in the first quarter, marking one of the highest volumes to be witnessed in the recent years.

Industry figures from the Tea Directorate indicated the volumes rose to 300.6 million kilos in the review period up from 212.6 million kilos in the corresponding period last year.

However, the directorate says production, which has already started declining in the last three months, will remain depressed for the remainder of the year because of the cold season and cessation of rain.

“The second half of the year is expected to register much lower production on account of cold weather conditions followed by dry weather,” the regulator said.