Tea farmers rake in electronic fare collection Sh106b at auction despite Covid shocks
Tea sold through the Mombasa Tea Auction earned Kenya farmers Sh106 billion in 2021 despite the effects of the Covid-19 and destabilisation of some export destinations following political disturbances, states an auction market report.
A market report by the East African Tea Traders Association (EATTA) indicates that in the review period farmers sold 470.5 million kilogrammes of tea at an average price of $1.99 (Sh225.666) which is an increase from $1.93 registered in 2020.
The 2021 production he said is less by 15.9 million kilogrammes of 486,554,634 recorded in 2020. Edward Mudibo, EATTA managing director said last year earnings accounts for a drop of 0.3 per cent to income realised in 2020 when the effects of Covid-19 heavily hammered the economy.
During the review period, volume of tea rejected by traders reached 20.50 per cent compared to 17.32 per cent rejected in 2020. The registered 2021 annual earnings exclude local sales.
Key export destinations, Pakistan, Egypt, Sudan and the United Kingdom maintained strong support to the Kenya tea despite the prevailing Covid-19 effects that continued to hammer the global economy.
Mudibo noted that during auction week 28 and 29, traders rejected the highest volume of tea at 55.47 per cent and 50.37 per cent respectively. This is when Kenya Tea Development Agency (KTDA) introduced a reserve price to tame declining earnings to the farmers.
The last auction of the year, he noted recorded $2.39 (Sh271.026) compared to $1.87 (Sh212.058) the same period last year.
In the 2021 production period auction conducted during Week 48, the market received the highest price of $2.49 (Sh282.366) compared to the highest price of $2.23 (Sh252.882) recorded in 2020.
Political upheavals During the review period some export destinations, for example, Afghanistan experienced political upheavals leading to reduced appetite of the Kenya tea.
Locally, the marketing of tea through the auction suffered a blow as traders reduced their appetite as the government through the KTDA introduced a minimum reserve price to shield them against further losses due to low prices.
In Week 1 and week 2 of this year, prices started on a high note compared to the same last year. During the first week of 2022, prices reached $2.45 (Sh277.83) compared to $1.97 (Sh223.398) the same period last year. But the pieces dropped slightly to $2.43 (Sh275.562) during Sale 02 conducted last week.