The price of the Kenyan tea dropped by Sh16 per kilogramme this week at the Mombasa auction, reversing the gains witnessed last week.
A report from auction indicates that the price dropped from Sh305 last week to Sh289 per kilogramme (kg) in Tuesday’s auction.
This marks only the second time since the beginning of the year that the beverage has registered a dip in price at the auction.
At the same time, the volumes at the auction dropped by 148,606 kg, to 6.2 million from 6.35 million that had been sold the previous week.
“Out of 115,356 packages (7,400,000 kg) available for sale, 96,576 (6,203,834 kg) were sold with 16.28 per cent going unsold,” said Mr Edward Mudibo, managing director of the East African tea Traders Association (EATTA).
According to EATTA, Egyptian Packers were dominant but operated at lower levels with more enquiries coming in from UK, Kazakhstan, and Russia.
However, the report says that UK was selective in their buying.
There was more interest at lower rates from Yemen and other Middle Eastern countries while Pakistan Packers and Afghanistan showed less activity with Sudan being active during the sale.
Tea production has dropped in factories with the regulator saying that the volumes are down 40 per cent currently.
Tea Directorate says that most factories are currently operating below their installed capacity due to the ongoing drought.
According to the regulator, the current drought is expected to cut tea production by 12 per cent to 416 million kilogrammes this year from 473 million registered in 2016.
Kenya is the leading exporter of the commodity in the world, selling 95 per cent of its tea in the global market.