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Tea prices at auction rally on stifled supply

News By Benard Sanga | 13th Sep, 2020

The price of tea at the Mombasa auction rallied higher this week with analysts expecting it to firm up at above $2 (Sh216) in the coming weeks due to a drop in local production.

Since July, the prices have rallied on stifled supply from India and Sri Lanka - Kenya’s biggest rivals in black tea market - due to labour lockdown by Covid-19.

Traditionally, local tea production drops starting August due to the cold weather, reduced rainfall levels and tea pruning that is predominantly done in July and August.

Yesterday, traders said tea volumes at the auction have already started to drop due to the low season and the trend will lead to further increase in price.

Meanwhile, traders said increased demand for tea is also driven by reports that the beverage boosts immunity, especially at this time of the coronavirus pandemic.

A report released on Thursday by East African Tea Trade Association (Eatta), which runs the auction, shows that the average prices rose to  $1.99 (Sh214).

This is an improvement of about 30 per cent in a span of two trading months since July and a significant gain from the worst prices last recorded in 2007

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