Tea’s auction price improvement reduces withdrawals

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This week, the price of tea increased during trading in Mombasa, leading to a 4 percent decline in the volumes of the beverage withdrawn from the auction floor.

The data derived from the East Africa Tea Traders Association (EATTA) shows that last week, 14 percent of the tea was sold, a decline from the 18 percent sold in the previous sale.

Also, the average price of tea increased to Sh212 from Sh205.

“Out of 13.6 million kilos available for sale, 11.6 million kilos were sold with 14.07 percent remaining unsold,” said EATTA in the market report.

On a positive note, the tea prices started on a high note in 2021, with two back-to-back sales before plunging in the third week of the month of January.

However, the price is still lower when compared to the identical time last year. In the fifth trading of 2021, the current price of tea is Sh212 per kilo, a downward trend from sh 227 in 2020.

The effects of the Covid-19 pandemic is affecting the Kenyan tea industry as leading to a demanding challenge. Over 95 percent of the total tea production in Kenya is shipped outside the country and therefore, the lower prices have been a result of the increased volumes in the global market.

The tea exports to Kenya’s major markets declined by 2.7 million kilos in the 10 months to October when contrasted with a similar period in 2019.

The data extracted from the Central Bank of Kenya indicates that Sh134.3 billion was earned by tea exports, an increase from 2019’s figure of Sh122.04 billion.

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Anthony Kiratu is the Founder of Finsolutions. He is a financial analyst with over 5 years experience in research, investment advisory, valuation and financial modelling. Anthony is a member of the Institute of Certified Investment and Financial Analysts and Institute of Certified Public Accountants of Kenya. He is passionate about development of African Capital Markets through training of investors and dissemination of information for sound financial and investment decision making process. He is also a part-time lecturer in the Certified Investment and Financial Analyst course in the subjects of International Finance, Portfolio Management, Equity Investment Analysis, and Fixed Income Securities. Email: anthony@finsolutions.co.ke Contact: +254 780216631

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