Tea prices at auctions in Mombasa, Kenya rose slightly last week due to strong demand in key export markets, also driving consumption of tea garden machines, as the US dollar strengthened further against the Kenyan shilling, which fell to 120 shillings last week All-time low against $1.
Data from the East African Tea Trade Association (EATTA) showed that the average transaction price for a kilogram of tea last week was $2.26 (Sh271.54), up from $2.22 (Sh266.73) the previous week. Kenyan tea auction prices have been above the $2 mark since the start of the year, compared with an average of $1.8 (216.27 shillings) last year. Edward Mudibo, executive director of the East African Tea Trade Association, said: “The market demand for spot tea is quite good.” Market trends show that demand remains strong despite recent calls by the Pakistani government to reduce the consumption of tea and its tea sets by the Pakistani government to cut import bills.
In mid-June, Ahsan Iqbal, Pakistan’s Minister of Planning, Development and Special Projects, asked the country’s people to reduce the amount of tea they drink in order to maintain the normal functioning of the country’s economy. Pakistan is one of the largest tea importers in the world, with tea imports worth over $600 million in 2021. Tea remains the main cash crop in Kenya. In 2021, Kenya’s tea exports will be Sh130.9 billion, accounting for about 19.6% of total domestic exports, and the second largest export revenue after Kenya’s exports of horticultural products and tea cups at Sh165.7 billion. The Kenya National Bureau of Statistics (KNBS) Economic Survey 2022 shows that this amount is higher than the 2020 figure of Sh130.3 billion. Export earnings are still high despite a drop in exports from 5.76 million tonnes in 2020 to 5.57 million tonnes in 2021 due to lower production.