Heavy rains in Kenyan tea growing areas brought a drop in prices of poorer tea at this week's auction as offers of low quality leaves rose, traders said on Wednesday.
The auction at the port city of Mombasa was held on Tuesday but auction results were only available on Wednesday.
"Tea of good quality sold dearer but teas with declining quality were noticeably down.
A good percentage of tea that was available was of declining quality hence the average price is lower," an official at Africa Tea Brokers (ATB) said.
He said prices of premium teas had come down to about the right level and that good quality in coming auctions would fetch high prices.
"Anything that will show improvement will sell quite well. You will now have the differential between good and poor teas widening," the official said.
Quality has fallen because of increased rains in growing areas.
Tealeaves grow faster in wet and humid conditions. Factories are then swamped by supplies that they are unable to process adequately.
"There is a large quantity of tea coming forward but not necessarily good quality coming through. The perception among buyers is that there will be increasing quantities of declining tea coming to the auction," the ATB said.
Best Broken Pekoes Ones (BP1s) rose to $2.48-$2.54 per kg, from $2.47-$2.52 at last week's auction. Best Pekoes Fannings Ones (PF1s) eased to change hands at $1.76-$1.94 from $1.80-$2.00 at the previous auction.
A total of 113,054 packages, or 7.3 million kg, were offered at Tuesday's auction but 5.20 percent was left unsold.
The ATB said another 120,640 packages, or 7.8 million kg, would be offered at next week's auction.
Comments
Comments are closed.