Low global demand, increased supply push down tea prices
A woman picks tea leaves at a farm in Southern Highlands of Tanzania. Prices for the commodity at he global market have been reported to fall by 7.15 per cent compared to those of last year. PHOTO | FILE
What you need to know:
- Despite an increase in East African tea exports, the world market’s commodity price slowed in October.
Dar es Salaam. Annual world tea price decreased by 7.15 per cent during the year ending October, 2018 when compared with the year ended in October, 2017.
The Bank of Tanzania (BoT) monthly economic review for November shows that the average world tea price decreased to $2.90 per kilo during the year ending October, 2018 compared with $3.12 recorded during similar month last year.
Prices at the Mombasa Auction also fell by 11.48 per cent to $2.58 a kilo from $2.92 during the reviewed period.
“Decrease in price was due to low global demands as supply increased,” noted the report.
At present, there are offerings from Kenya, Uganda, Tanzania, Rwanda, Burundi, Democratic Republic of Congo, Malawi, Madagascar, Zambia and Zimbabwe.
Mombasa auctions attract the UK, Pakistan, Egypt, Afghanistan, Sudan, Iran, Yemen, United Arab Emirates, Ireland, Somalia, Canada and Singapore as major buyers.
According to the Tea Board of Tanzania, tea production decreased to 26,975.4 tonnes in the year to June 30, 2017 from 32,628.6 tonnes the previous year.
It is estimated that in 2016, global production of tea was about 6 million tonnes, led by China with 40 per cent and India with 22 per cent.
Kenya, Sri Lanka, and Turkey were other major tea producers. Tea is the most popular manufactured drink consumed in the world, equaling all others – including coffee, chocolate, soft drinks, and alcohol – combined.
Most tea consumed outside East Asia is produced on large plantations in the hilly regions of India and Sri Lanka, and is destined to be sold to large businesses.
