Tea prices dip 12pc in last seven months, report shows

Tea prices for the last seven months have decreased by more than 12 per cent but still remained above the $2 (Sh239) mark.

A market report by the East African Tea Trade Association (EATTA) indicates that since the third week of February when Russia invaded Ukraine the average price has decreased from $2.53 (Sh302.80) to $2.22 (Sh265.70).

Edward Mudibo, EATTA Managing director attributed the situation to various factors. Average prices during the period have decreased by $0.31 while the percentage of unsold tea increased by almost double.

“The Russia-Ukraine war, changing weather patterns and low demand of the commodity in some export destinations has contributed to the price decline. Shipping companies are still yet to resume business with Russia while commercial banks are shy to finance traders who have been exporting tea to Russia and Ukraine,” he said in a phone interview.

Low demand

Even though the political campaign and 2022 elections did not affect the tea trade as in other years, Mudibo stated that there has been low demand for the commodity in some recipient countries. Between February and the end of last week, the volume of unsold tea increased from 14.75 per cent to 27.41 per cent during last week’s auction at Mombasa tea auction.

Mudibo said during Sale 7 carried out during the third week of February this year, traders rejected 14.75 per cent of the total tea offered for sale compared to 3.3 million kilogrammes accounting to 27.41 per cent rejected last week by  the buyers.  “This could be partly due to traders shying from specific tea and low demand in some international market segments,” he added.