Tea prices at the Mombasa auction have remained stable in the first half of this year, market data shows, with farmers reaping from a strong dollar.
A kilo has averaged above the two dollar mark since the start of this year, data by the East African Tea Trade Association (EATTA) shows. Last year, a kilo averaged $1.80 (Sh212.69) in the six-moths to June.
The lowest price this year remains $2.16 (Sh255.23) recorded three weeks ago.
In February, the auction recorded a four-year high on prices driven by demand from key global markets. A kilo averaged $2.65 (Sh309.58).
“Anything above two dollars is considered a good price,” EATTA managing director Edward Mudibo notes.
Pakistan, Egypt, Yemen, and other Middle Eastern countries have maintained interest at the auction, Mudibo said.
Last week, Sudan, Kazakhstan, and other CIS states showed more activity with Bazaar and UK active, as the auction prices averaged $2.25 (Sh265.86 ).
This was up compared to the previous week price of $2.24 (Sh264.68 ).
There was fairly good demand for the 185,900 packages (12.3 million) kilos available for sale, EATTA says in its weekly report.
Of these, 141,620 packages (9,334,019 kilos) were sold with 23.82 per cent of packages remaining unsold.
“Afghanistan and Russia showed some support with less inquiry from Iran. Local Packers were less active. Somalia was more active at the lower end of the market,” Mudibo said.
Since Monday, at least 12.4 million kilos have been availed for sale, according to market data, which is an increase of 228,827 kilos compared to last week.
Meanwhile, tea farmers affiliated to Kenya Tea Development Agency (KTDA) started receiving the Sh37.1 billion final payment (bonus) last week Friday.
This is for the financial year ending June 30, 2022 and monthly payment for June green leaf.
It represents a significant increase of over the Sh21 billion paid out in the previous financial year.
Farmers have also been paid over half-a-billion shillings (Sh519 million) as dividends from KTDA Holdings subsidiaries within the same payment disbursement.
According to the agency, it has invested in profitable subsidiaries along the tea value chain, with profits shared out as dividends to the farmers.
Disbursement of these payments to farmers marks the close of the financial year ending June 2022, that has seen a major recovery in growers’ fortunes.
“The performance has been the best farmers have had in a number of years,”KTDA Holdings chairman David Ichoho said.
However like other households, tea farmers are also feeling the pinch from the high cost of living in the country, mainly rising commodity prices.
“The payments will come in handy as we take our children back to school and will help us easily handle the upcoming financial obligations,” Ichoho said.
WATCH: The biggest news in African Business