Prices of teas from KTDA-managed factories improved marginally at the Mombasa Tea Auction this week, selling at an average of Ksh.264.40 (US$.2.43) per Kg compared to Ksh.249.15 (US$.2.29) at the previous auction, a 6.1 percent rise.
At the auction held August 2, KTDA managed factories offloaded 84 percent of all teas offered at the market, down from 87 percent sold the previous week as the market continues to positively embrace the minimum price regime that was introduced in July.
The teas sold at Ksh.206.74 (US$.1.90) prior to the introduction of the minimum reserve price, indicating the market is warming to the new regime.
The introduction of the minimum reserve price by the new KTDA Holdings board was informed by the need to improve farmers’ earnings that had for a long time taken a beating from low prices.
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In his market update last week, KTDA Holdings Acting CEO, Wilson Muthaura said the improvement in price and absorption of KTDA teas is a reflection that tea buyers appreciate the need for sustainable tea farming.
Prices of tea at the Mombasa Tea Auction have been on a downward trend since 2018 and had this year slid below Ksh.217.60 (US$.2) which threatened to push farmers to losses as low selling prices cannot cover production costs.
KTDA-managed factories are exploring ways of reducing operational costs, including instituting energy-saving measures and installing more efficient tea processing machines.
