War to deny Kenya Sh7b tea market
Tea prices dipped 6.5 per cent at the Mombasa auction this week as traders continued to reduce exports to Russia following its invasion of Ukraine.
Industry players are concerned that continued reduction in exports to these two countries could threaten the Sh 7 billion tea export market.
Tea worth Sh850.2 million was rejected by traders during Sale 10 this week, accounting for 25.01 per cent out of 13,271,813 kilos offered fortrade.
In total, the quantity of tea rejected this week increased by 41.5 per cent compared to Sh600 million worth of the commodity that traders declinedduring Sale 09.
War set to last
US Secretary of State, Antony Blinken said on Sunday there will be an increase in pressure on Russia through sanctions and provide more aid to Ukraine, but warned that Russia held a military advantage that western allies are finding hard tocounter and the war was set to last “some time”.
This means the impasse may hold for a long further affecting Kenyan exportsto the two regions. Amarket report released by the East African Tea Trade Association(EATTA) this week indicated that the average price dropped to $2.30 (Sh262.2) during Sale 10, compared to $2.46 (Sh280.44) registered during Sale 09, which was conducted last week.
EATTA managing director Edward Mudibo noted that UK, Yemen and other MiddleEastern countries were active but traders from Russia, Afghanistan and Iran were quiet during this week’s auction.
Mudibo said the annual exports to Russia translates to $60 million(Sh6.8billion) worth of black ctc tea that is exported to Russiay.
“There seems to be a high population in Russia that consumes black ctc teacontrary to claims that the country is a largely orthodox market,”he said.
The reduction in exports to Russia, Ukraine and other Eastern Europe and Asia countries has also been affected by shipping companies detailing which areas to skip.
