Let farmers ‘export tea directly’
By John Otini, October 25, 2022Tea farmers have been advised that they can make more profit from if they export directly, instead of transporting the commodity to auctions for testing, Kericho governor Erick Mutai has said.
The auction have brokers who buy the tea for export according to quality then export the commodity where prices depend on the test results.
“I wonder why we have to take our tea all the way from Kericho to Mombasa, when you reach Mombasa, you get some guy with a very sharp nose smelling what kind of tea we have,” said Mutai when the Kenya Tea Development Authority (KTDA) board paid him a courtesy call.
Direct sales
“I prefer the chairman that we reach a point where factories are selling directly,” Mutai told KTDA chairman David Ichoho.
This comes at a time when tea prices at the Mombasa auction increased marginally, easing a slide that had hit the market in the previous four sales on account of lower demand in the international market.
Data from the East African Tea Trade Association (EATTA) indicates that the price of the beverage shot to $2.37 (Sh286.80) from $2.33 (Sh281.93) in the latest trading, accounting for 1.7 per cent.
The high demand and increase in prices comes as relief to farmers who have been staring at low earnings since the month of May, 2022.
The auctions attract principal overseas interest from the major tea consuming countries in the world with the United Kingdom, Pakistan, Egypt, Afghanistan, Sudan, Iran, Yemen, United Arab Emirates, Ireland, Somalia, Canada and Singapore as the major players. The buyer representation spreads over more than fifty countries internationally.
At the Mombasa Tea Centre, roughly a hundred traders and nearly a dozen brokers come together on Mondays and Tuesdays and move an enormous amount of black tea around the world. East Africa sells hundreds of millions of tons of tea every year, and lately, the price has been at an all-time high.
The Export Auction System was initiated in November 1956 in Nairobi on a very small scale with only small quantities of secondary grade teas offered fortnightly under the auspices of the East African Tea Trade Association.