At this week’s auction, tea prices slipped slightly below the ideal two-dollar barrier, as the commodity continues to have a mixed year.
After averaging $1.70 (Sh186.75) for the most part of the first half, it had risen to above $2 per kilo in the preceding two weeks.
A kilo cost $1.98 (Sh217.50) on average this week, down from $2.01 (Sh220.80) last week.
According to market officials at the East African Tea Trade Association, any price below $ is “not good” (EATTA).
The cash crop has only fetched a price of $2 (Sh219) three times this year, indicating meagre profits for farmers who are likely to be cushioned by the strong dollar against the shilling.
In July, auction prices at Mombasa’s Tea Trade Centre hit an all-time low of $1.55 (Sh170.27), prompting the government to impose a minimum price to protect farmers.
At the Mombasa auction, the minimum reserve price for Kenyan processed tea is Sh183 ($1.67).
The total volume transacted this week was 530,456.00 kilos lower than the previous week.
“There was a good but irregular demand for the 128,659 packages (8,382,107.50 kilos) on offer closely followed by the quality with 88,960 packages (5,719,925 Kilos) being sold. 30.86 per cent of packages remained unsold,” EATTA notes in its weekly report.
Pakistan, which consumes about 40 per cent of Kenyan tea exports, reduced interest while the UK was active but selective with less activity from Russia.
There were some purchases from Iran with Afghanistan quiet while Somalia lent good support.