Tea prices at the Mombasa auction fell to a five-year low in the last weekly sale, as the value of the product continues to deteriorate, leading to a record product recall during trading.
A market report from the East African Tea Traders Association (Eatta) indicates that the price of the drink dropped to Sh181 last week, down from Sh187 in the previous sale.
The lower price caused 20 percent of the tea that had been offered for sale to be removed from the auction floor, as traders chose to wait and see if prices would improve in the next trading session.
The price of the drink has been falling for almost a month, pointing to lower incomes for farmers in the current financial year, which ends this month.
“Of the 13 million kilos available for sale, 10.3 million were sold while 20 percent remained unsold,” EATTA said.
The drop in price occurs despite the fact that the volumes offered for sale fell by 99,499 kilograms compared to the previous sale.
Low prices caused 2.7 million kilograms to be removed from the trading floor and they will be offered again at the next auction.
The price of tea has been fluctuating at auction even as volumes offered for trade have steadily declined in the last five sales.
According to the sector regulator, the low demand for the drink has been a factor that contributed to the depressed earnings.
“Demand has also been affected to some extent by the reduction in the purchasing power of consumers due to the effect of the global economic recession that is perpetuated by the Covid-19 pandemic, as well as the devaluation of some foreign currencies against the dollar. American, “said The Tea Address.
Prices have largely remained below a dollar and only touched a two-dollar mark during sale 10 that took place in March of this year.