The value of tea neared a three-year low as poor prices continue at the auction amid increasing volumes.

In the latest sale, a kilo on average fetched Sh247, down from Sh253 in last week’s trading at the Mombasa auction.

The Tea Directorate had projected volumes would rise and that this was likely to affect the price.

But a market report by East African Tea Traders Association indicates the volumes offered for sale this week increased by 931,362 kilos, marking the first time volumes have grown in the last one month.

The auction had started on a high of Sh270 in the first sale of the year but the prices have been falling in the last three months.

This has prompted the directorate to mull conducting investigations into underlying factors affecting the value of the commodity following a sustained poor performance.

For the last nine weeks, the price of tea at the auction has been declining, raising concern among stakeholders.

Tea production for the month of February was 27.93 million kilos against 22.60 million kilogrammes recorded during the corresponding month of 2017, according to the directorate.

The increase in production was largely attributed to rains experienced in the West of the Rift that saw the region’s output rise from 12.23 million to 18.65.

Source: Business Daily