Tea price hits four-month peak at weekly auction as volumes fall

The price of tea at the auction has hit a four-month peak, with an eight percent increase in last week’s sale.

A market report by East Africa Tea Traders Association (Eatta) shows a kilo of tea fetched an average Sh219 against Sh203 that was previously recorded.

The price of tea started at Sh215 a kilo in the first sale of 2019 before taking a downward trend to touch a four-year low of Sh193 early this month.

However, prices have been rebounding in the last two sales as volumes offered for sale at the auction declined.

The volumes have been coming down in the last three months as the drought that ravaged the country in the first quarter of the year cut supply of green leaf to the factories.

Over 40,000 employees working in tea factories have been forced to go on advance leave as tea production in the factories plummeted by half.

Kenya Tea Growers Association (KTGA) said harsh climatic conditions have forced factories to operate three to four days a week, significantly cutting down on output. According to KTGA, it will take another six to eight weeks for the crop to recover when it starts raining, pointing out that the industry performance for 2019 will be poor than any other time.

The Tea Directorate had forecast that the volumes of the beverage will this year drop to 416 million kilos from a high of 474 million kilos last year.

The decline, said the directorate, will see the average auction price surge to Sh280 a kilo up from Sh260 achieved in 2018.