Kenya tea prices tick up on demand from Egypt

NAIROBI: Kenyan tea prices edged up at this week's auction on demand from Egypt and Pakistan and traders said on Wednesday prices would rise in upcoming auctions due to low volumes as a result of drought in the country.

Egypt is the leading buyer of tea from Kenya, the world's largest exporter of black tea. Demand from the north African state had dropped in the past few weeks owing to a political upheaval that affected tea imports.

Most of the tea on offer was bought without any bids -- an indication of strong demand said Peter Kimanga, tea manager at Global Tea and Commodities Kenya.

"Egypt continued to be very strong at the auction, with prices of tea to their packers going up," Kimanga said.

"Volumes of tea are likely to come down due to drought in major tea growing regions, and the prices will eventually go up in the coming auctions."

Tea was the top foreign exchange earner in east Africa's biggest economy last year when it raked in $1.2 billion, but drought conditions from late last year could cut production by 12 percent this year, the Kenya Tea Development Agency has said.

ATB said that 24.92 percent of the 139,104 packages on offer were left unsold at the auction in the port city of Mombasa.

Egypt was the main player at the auction, while Pakistan, Yemen and other Middle Eastern countries were also present.

Best BP1s sold for $3.52-$3.90 which was slightly higher than the $3.50-$3.86 fetched at last week's sale, Africa Tea Brokers (ATB) said in a report.

Best Pekoe Fanning Ones fetched $3.36-$3.66 per kg, down from $3.50-$3.86 per kg the previous week.