Kenyan tea prices rose at this week's auction ahead of the Muslim holy month of Ramazan when trading activity in Islamic countries falls considerably and consumption there rises. Mombasa-based Africa Tea Brokers (ATB) said 13 percent of tea on offer, or 11,117 packages, was unsold.
"Strong general demand continued for the 83,860 packages (5.28 million kgs) on offer," ATB said. Leaves offered at the weekly auction have been fetching high prices most of this year as buyers stock up over worries drought will cut output in the world's biggest exporter of black tea.
There is usually subdued production during the cold season between June-August when farmers take the chance to prune bushes. Industry officials say there has been insufficient rain on farms around Mount Kenya in the central region, and meteorologists are predicting prolonged drought in that area.
Leaf production in Kenya is expected to fall by some 6 percent this year due to dry weather, but earnings are seen rising to about 65 billion shillings ($851.3 million), versus last year's 62 billion shillings, due to record high prices. The Islamic holy month of Ramazan, when Muslims around the world fast during daylight hours, is expected to begin in a few days time.
"Egyptian Packers lent very strong support while Yemen and other Middle Eastern countries showed strong enquiry with Pakistan Packers, Afghanistan, Sudan and UK and Kazakhstan more active," the ATB said in a regular market report. Top BP1s exchanged hands at between $3.88-$3.52 per kg from last week's $3.82-$3.38. Best PF1s sold at $3.58-$3.40 compared with $3.46-$3.36 previously, according to ATB.
Tea Brokers East Africa said another 78,869 packages will be up for sale at next week's auction. The sale held every Monday and Tuesday is a conduit for tea from 12 African producers but most of the black tea sold there is grown in Kenya.