Prices of tea at the latest Mombasa auction hit the highest prices in six years, data from the East African Tea Traders Association (Eatta) has revealed.
Tea fetched Ksh276 per kilogramme, up from Ksh265 per kilogramme posted on the final trading day of 2021. Volumes also grew by 448,980 kilogrammes compared to the previous trading session.
“There was an improved general demand for the 191,560 packages (12.6 million kilos) available for sale with 160,200 packages (10.7 million) being sold while 16.37 percent of the packages remained unsold,” Eatta stated.
The news was welcomed by stakeholders with farmers particularly looking forward to better prices in 2022 following a slump in the second half of 2021. The prices had been steadily trending downwards from November 2021 and fell to below the minimum cost introduced by the Ministry of Agriculture of $2.43 (Sh274) per kilogramme to protect farmers.
Prices, however, recovered in the last four sales of 2021. The minimum cost was among state-backed reforms introduced in the tea sector as prices hit a 10-year low of Ksh186 per kilogramme.
With the looming dry season expected to negatively impact the production of green leaf on the farms, farmers are hoping the higher prices will be maintained in coming weeks.
The latest auction comes against the backdrop of KTDA’s (Kenya Tea Development Agency) partnership with Kenya Railways to have tea transported to Mombasa on the Standard Gauge Railway (SGR). The maiden trip on January 6, 2022 saw 31 containers of packed tea (800 tonnes) transported to Mombasa via the SGR.
KTDA sees the partnership as a way to lower transportation costs and eliminate inefficiencies in the tea supply chain. In the ongoing pilot phase, KTDA will be moving 20,000 packages per week on the SGR as it looks to transition fully to rail transportation.
KTDA is currently establishing a tea handling facility next to the Nairobi Inland Container Depot (ICD) to further streamline the process.
“Plans to transport tea via Kenya Railways have been in the pipeline for a while now as we explored new technologies and infrastructure to enhance efficiencies in the tea supply chain. We are cognizant that the progression to Kenya Railways will guarantee faster, safer and more convenient transportation of tea,” stated Prof Hamadi Boga, Principal Secretary in State Department for Crop Development and Agricultural Research.