Tea prices at the Mombasa auction dropped by Sh14 this week after remaining flat in the previous two weeks, defying the ongoing drought that had been touted to increase the price of the beverage due to low volumes.
The price declined to Sh272 per kilogramme down from Sh286 in the previous sale held last week.
“Out of 105,840 packages (6,845,000 kilos) available for sale, 94,800 (6,128,053 kilos) were sold with 10.43 per cent going unsold,” the East African Tea Traders Association (EATTA) said in a statement.
According to EATTA, Pakistan Packers, Afghanistan and Egyptian Packers were active buyers while Yemen and other Middle East countries came in at lower levels.
Russia, Kazakhstan and Sudan were also active buyers, while the UK and Iran were quiet during the auction.
Somalia was active but at the lower end of the market.
Tea production has dropped in factories with the regulator saying that the volumes are down 40 per cent at the moment. The decline is attributed to the ongoing drought that has ravaged most parts of the country.
The Tea Directorate said that most factories are currently operating below their installed capacity.
Kenya’s export earnings from tea declined by 3.6 per cent in 2016 compared with the previous year in what the authority attributed to increase in volumes at the auction.
According to the directorate, earnings dropped from Sh125 billion in 2015 to Sh120 billion last year.