The average price of Kenya's top grade tea held steady at $3.11 during this week's auction, but it was expected to rise in the weeks ahead, brokers said on Wednesday. Mombasa-based Africa Tea Brokers (ATB) said in its weekly market report there was strong demand for the 145,016 packages (9.18 million kgs) on offer, with 14.92 percent remaining unsold.
At the previous sale, 148,024 packages were offered for sale, with 15.47 percent going unsold. Best BP1s were sold at $3.28-$2.94 per kg compared with $3.40-$2.82 per kg last week. Best Pekoe Fanning Ones fetched $3.70-$3.16 per kg compared with $3.67-$3.01 per kg previously.
"There was about 30 to 32 percent low quality tea from neighbouring countries and buyers were focusing more on the Kenyan high quality tea," said Peter Kimanga, a manager at Global Tea and Commodities Kenya.
"We are taking an up tone (in prices) with the cold season setting in, which will impact on production in the next two months." The cold season is starting in the east African nation's tea growing highlands and the cold weather normally inhibits the development of tea leaves.
"Pakistan Packers and Afghanistan lent strong support while Egyptian Packers showed stronger activity with more interest from Yemen, other Middle Eastern countries, Sudan, Kazakhstan and Russia," ATB said. Tea exports earned Kenya $1.16 billion last year, making the sector the country's top foreign exchange earner.
Regulator Tea Board of Kenya said tea production for the first four months of the year stood at 116.6 million kg, 20.9 percent lower than the same period in 2010.
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