Tea prices from Kenya Tea Development Authority (KTDA) managed factories increased marginally by 6.1 percent at the Mombasa Tea Auction this week.
The tea is now selling at an average of Ksh.264.40 per Kg compared to Ksh.249.15 in the previous auction.
KTDA managed factories offloaded 84 percent of all teas offered at the auction held on August 2, down from 87 percent sold the previous week.
It is as the market continues to embrace the minimum price regime introduced in July.
Further, the teas sold at Ksh.206.74 before the introduction of the minimum reserve price, indicating the market is warming to the new regime.
Additionally, the introduction of the minimum reserve price by the new KTDA Holdings board was by the need to improve farmers’ earnings that had for a long time taken a beating from low prices.
KTDA Holdings Acting CEO, Wilson Muthaura in his market update last week, said the improvement in price and absorption of KTDA teas is a reflection that tea buyers appreciate the need for sustainable tea farming.
Prices of tea at the Mombasa Tea Auction have been on a downward trend since 2018 and had this year slid below Ksh.217.60.
The trend threatened to push farmers to losses as low selling prices cannot cover production costs.
Furthermore, KTDA-managed factories are exploring ways of reducing operational costs.
The costs include instituting energy-saving measures and installing more efficient tea processing machines.