Rwanda tea earns higher auction prices as Kenya lags

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Tea from Rwanda has continued to dominate the Mombasa tea auction, achieving an average of Sh354.75 per kilogramme compared to Kenyan tea which traded at Sh299.28 per kg.

In last week’s auction, Kenya’s 9,424.6 tonnes of tea generated Sh2.8 billion, with Sh2.1 billion of the total amounted generated by Kenya Tea Development Agency (KTDA) factories.

Data from the auction indicate that out of the 10,300 tonnes traded as KTDA-managed factories, 6,600 tonnes was succesfully sold while 1,600 tonnes was returned to the warehouse unsold, as players failed to agree on the price.

Rwanda sold 552 tonnes of tea, taking home Sh196.1 million from the auction.

In the market, Kenya’s tea continued to perform poorly as only Mununga Tea Factory achieved the best price of Sh399.9 per kilo, managing to sell upto 117 tonnes of tea, while Kapsara Tea Factory sold at the lowest price, only managing to sell Sh254.13 per kg for each of its 54,744 kilos presented at the auction. 

KTDA Holding Chairman Enos Njeru said in the weekly market, 27 smallholder factories managed to sell each over 1,000 tonnes of made tea, with the leading being Kinoro 1,892 tonnes, Rukuriri 1,805 tonnes, Mungania 1,780 tonnes, Ngere 152,372 kilos while Imenti sold 152,816 kgs.

“The KTDA tea factories continue to use the tea auction for trading and we always encouraged the farmers to always pluck the recommended green leaf for the export and the local markets,” said Njeru. Other teas sold were Uganda 885,751kgs, and Burundi 7,088 kgs

The auction proceeded with the dealers’ concerns over the suppressed prices owing to the introduction of Sh2.28 levy on tea per kilo on the value of the export in May 1.

Peter Kamore said it was disheartening that the prices of the tea have decreased since the introduction of the tea levy, as presently only Mununga tea factory sells its tea above Sh399 per kg at the auction. “ There is a need for an audit to save the tea industry from losing the market as the government can waive the levy projected at Sh1.2 billion per year instead of watching the sector run into turmoil,” said Kamore.

The East African Tea Trade Association Managing Director George Omuga said the introduction of the levy on Kenya’s tea has continued to suppress the price, with the buyers shifting to the alternative producers.

“The producers from Rwanda, Uganda and Tanzania are smiling all the way to the bank owing to the demand for their tea, with a few turning to buy the commodity from Kenya for blending,” said Omuga.