This archive report was first published on 4 July 2019.
Published on July 4, 2019, tea prices at the auction improved marginally during this week's trading, but remain vulnerable to external forces.
Stakeholders blame the decline on both external and internal factors that have seen prices tumble to levels last witnessed in 2014.
The factors include diminishing purchasing power from traditional markets, high volumes locally, and the closure of the Pakistan-Afghanistan border to address tea smuggling.
According to an auction report, a kilo of tea on average increased to Sh202 from Sh190 last week.
However, the news of the border closure led to a decline in prices, as Peter Kimanga, director of Global Tea, noted: "The price was doing well during the auction this week but when the news on closure of the boarder got to the auction, the prices declined,"
Edward Mudibo, managing director of East Africa Tea Traders Association (Eatta), attributed the depressed prices to external and internal factors, including declining purchases by Kenya's major buyers and high volumes locally.
"The depressed prices have been occasioned by the external and internal factors. The internal factors include high volumes locally, which has seen the supply surpass demand," said Mr Mudibo.
Stakeholders warned that the value of Kenya's tea will decline further following the economic and political turmoil in major markets that the country exports to, which has seen the demand of the beverage drop.
