Tea prices rise at auction
21 August 2013, 13:58
Nairobi - The average price of Kenya's top grade Broken Pekoe Ones tea rose to $4.13 per kg at this week's sale from $4.06 at the last auction, Africa Tea Brokers (ATB) said on Tuesday.
Kenya is the world's top black tea exporter, and the crop is a major foreign exchange earner in east Africa's largest economy.
ATB said that demand from Egyptian buyers was strong. Somalia bought heavily at the lower end of the market.
A tea broker said demand from traders who sell to Egypt, the biggest buyer of Kenyan tea, came through despite a political crisis that has escalated into violence in the aftermath of the overthrow of President Mohamed Mursi.
"The people who buy tea for the Egyptian market are traders, so with the violence, they could opt to buy at these price levels, stock up and hope to offload at a mark-up later to their outlets in that country," a tea broker said.
"It could be that they are hedging or anticipating based on the events unfolding in that country."
Kenyan currency traders have said the shilling could come under pressure if the violence in Egypt continues and tea exports are hurt.
ATB said Best BP1s sold at $3.70-$4.56 per kg, compared with $3.80-$4.32 per kg at the previous sale.
Brighter Pekoe Fanning Ones (PF1s) fetched $2.36-$2.93 per kg, down from $2.40-$2.98 last week.
There were 122,544 packages on sale, with 19.88 percent left unsold. At the last sale, 119,955 packages were offered for sale, with 20.3 percent remaining unsold.
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