Tea Auction Continues to Record a Decline in Prices

The weekly Mombasa Tea Auction held on the 26th and 27th May 2020 recorded 12.6 million kilograms of tea offered for sale. The amount of tea on offer increased from 7.8 million kilograms offered for sale during the same period last year.

Of all the tea offered for sale, 10 million kilograms were sold compared to 6.4 million kilograms sold in the same period in 2019.

The sale recorded a decline in prices, with a kilogram selling at an average of $1.83, compared to $2.11 for the same period last year and $1.87 during the previous auction.

The Competition Tribunal overturned an order from the Competition Authority of Kenya (CAK) seeking to stop brokers at the Mombasa sale from price-fixing. Therefore, brokers will continue getting a 1.25% commission on the value of tea that goes through the auction, earning them KSh1.4 billion annually in fees.

However, the Tribunal mandated the Tea Directorate to approve any changes in brokerage fees. The exemption will only be allowed for two years from the date of delivery of the judgment.

See Also:

Tea Auction Brokers to Retain KSh1.4 Billion Fixing Fees

Tea Sector Lobby Group Pushes for Reforms