Kenya Tea Development Agency managed factory tea prices rose by 1.74 percent to close at $2.64 per kilogram (kg) of made tea during the last auction of 2019 compared to $2.59 per kg at the same period last year, the KTDA disclosed on Monday.
This is against the backdrop of a fall in global tea prices occasioned by the global oversupply of the commodity and continuous political instability in the key tea markets.
The global tea market currently has a surplus of 200 million kgs of made tea.
This has seen the Mombasa auction prices average at $ 2.12 per kilo during the last auction for year 2019, whereas KTDA-managed factories prices fared better, averaging $2.64 per kg.
“Due to the on-going rains, greenleaf production between July and November rose to 488,020,108 kgs compared to 481,572,794 kgs delivered in the same period last year. Sold teas at the auction dropped by 4.6% from 102 million kgs to 97 million kgs in this period,” KTDA said in a statement issued in Nairobi.
Pakistan, Egypt, UK, UAE and Sudan remain Kenya’s key export destinations for the black Crush, Tear, Curl (CTC) tea type processed in Kenya.
According to KTDA, these countries have had significant currency devaluation due to political/economic crises.
Tea being a commodity traded in US Dollars, the currency devaluation reduces the purchasing power of the consuming population.
The resumption of economic sanctions by the US on Iran also cut off one of the markets for Kenyan teas, KTDA pointed out.
JK/as/APA