KTDA factories’ tea prices registered a rise, albeit marginally, during the last auction of 2019.
During the auction, the agency-managed factories closed at $2.64 per kilogram, against a $2.12 per kilogram for the Mombasa auction prices. In 2018, the agency-managed factories closed at $2.59 per kilogram. Therefore, 2019 saw a 1.74% increase in prices.
In the recent past, tea prices have suffered a major low, an occurrence many attribute to its supply overriding the demand. Therefore, it has led to global oversupply of the product. As reported by Africa Business Communities, the global tea market currently has a surplus of 200 million kilograms of tea.
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Additionally, production between July and November rose to 488,020,108 kgs compared to 481,572,794 kgs delivered in the same period last year. Therefore, sold teas at the auction dropped from 102 million kgs to 97 million kgs in this period.
Another factor that might have led to the decline in Kenyan tea prices, is the currency devaluation in its major export destinations. This arises from political and economic crises, thus reducing the purchasing power of the citizens.
These export destinations include Pakistan,Egypt, United Kingdom, United Arab Emirates and Sudan.
However, KTDA CEO, Mr Lerionka Tiampati, argues that KTDA-managed factories are diversifying to orthodox teas such as purple tea and white premium. This is a move aimed at reducing overreliance on black CTC tea. This is because orthodox tea has a growing demand and fetches KSh50 more per kilogram above the black tea.
Some of these factories are Kangaita, Michimikuru, Imenti, Thumaita, Itumbe, Gitugi and Kiru.
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