The average price of African tea fell 6 percent to $2.44 a
kilogramme (2.2 pounds) on Tuesday to a five-week low at the Mombasa
sale, which includes leaves from producers in Uganda, Kenya, Rwanda,
Burundi and Democratic Republic of Congo. Prices peaked this year at
$2.64 per kilogramme on March 10.
Tea buyers are delaying purchases “as they are anticipating an
increase in supply at lower prices in the coming weeks,” East African
Tea Trade Association Managing Director Edward Mudibo said in an
e-mailed response to questions on Wednesday.
“The price decline could also be a price correction,” he said. “The
preceding steep price hikes could have been faster than anticipated.
The prices are therefore stabilising.”
East Africa’s long wet season, which usually runs March through
May, is crucial for agricultural producers in a country that largely
relies on rain-fed irrigation. Kenya is the world’s largest exporter of
black tea, which is one of the country’s biggest sources of foreign
exchange.
“The long rains are about to come, but what’s happening is a
correction in the market because prices rose too sharply last month,”
Peter Kimanga, director of Global Tea & Commodities, said by phone
from the port city of Mombasa on Wednesday.
Even if the rains come as forecast, it may take six weeks to two
months for tea volumes to catch up, said Tom Muchura, director of
Mombasa-based Africa Tea Brokers Ltd., by phone.
Africa Tea Brokers said last month that poor weather including
drought conditions and hot temperatures had affected tea-growing areas
in and around Kenya’s Rift Valley.
“There is a price adjustment because of the sharp rise in the last
two months,” Muchura said, adding that “There had to be a drop.”
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