Tea prices at the Mombasa auction rallied to a five-month high this week, marking a fourth straight climb since the government set a minimum price for the beverage three weeks ago.
A market report by the East African Tea Traders Association (Eatta) indicates that the beverage’s price increased to Sh210 from Sh203 last month.
The lobby attributes the sharp rise in price to the high demand witnessed during the sale held on Monday and Tuesday.
“There was a much-improved demand for the 182,500 packages (11,951,444 kilos) available for sale, 141,340 packages (9,287,405 kilos) were sold with 22.55 percent of the packages remaining unsold,” said the Eatta.
In the last three seasons, tea prices plummeted to the lowest level ever witnessed in Kenya, forcing the government to set a minimum price to protect farmers’ income after the cost buying price fell below the cost of production.
A fortnight ago, Agriculture Cabinet secretary Peter Munya issued a directive for traders to pay a minimum of Sh183 for a kilo of Kenya Tea Development Agency teas at the Mombasa auction, following a sharp price decline, which he said was subjecting farmers to losses.
Agriculture Cabinet secretary Peter Munya said an increase in value was an indication that the reserve price is now working.
“Buyers are now paying above the reserve price and this is a confirmation that the set price is now working, after reluctance from the buyers in the last two weeks,” said Mr Munya.
The Cabinet secretary said the reserve price at the auction has now been established and that buyers will have to stick with that. – businessdailyafrica.com
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