Auction data revealed 16% of tea remained unsold this week, up from 22% in the previous sale, as prices increased to Sh207 per kilogram from Sh205, according to market analysis. The East African Tea Traders Association reported 144,121 packages (9,363,852 kilograms) sold out of 172,431 available, marking a decline in offered volumes from 10 million to 9.3 million kilograms over three consecutive sales.
Analysts noted that shrinking auction volumes could drive prices higher in upcoming weeks. Buyers had anticipated price increases due to drought-related supply constraints, which have limited green leaf availability to processing factories. The Tea Directorate projected this year's production would drop to 416 million kilograms from 474 million in 2018, potentially pushing average auction prices to Sh280 per kilogram.
The decline mirrors challenges in the coffee sector, where lower output has strained foreign exchange inflows. Market reports indicated the commodity's price remained near a four-year low despite the marginal increase, with buyers expecting further volatility due to ongoing supply disruptions.
