When the legendary London Tea Auction ceased to operate, the Mombasa Tea Auction quickly grew becoming the biggest black CTC tea auction in the world, commanding a huge influence on market prices. As the only multi-origin auction centre handling tea from 10 producer countries, an average of 13Million kgs of tea is offered and almost 12Million of that, sold weekly.
Kenyan and International tea exporters bid for tea for their respective clients based in traditional markets such as Pakistan, Egypt, the United Kingdom, Afghanistan, and in emerging markets such as Indonesia, New Zealand, Ghana, and Chile.
A timeline of Kenyan Tea Trading through Public Tea Auctions
The Mombasa Tea Auction Process
Takes place on two consecutive days with secondary grades auctioned on Monday and primary grades on Tuesday.
The logistics concerning each auction begin two and a half weeks preceding the actual date of sale. Through designated tea brokers, the Kenya Tea Development Agency which manages small-scale farmers, and the other tea producers distribute samples weighing between 50-80 grams of each lot/invoice of tea to be auctioned to prospective buyers. The buyers, then, evaluating these samples visually and olfactorily and by texture and taste, determine the price range within which they would bid for the teas on offer at the auction.
Once purchased, exporters ship either in bulk directly to the clients where the tea is re-sold for retail, or to companies specialising in blending and packaging. These companies then sell the tea ready-packed under various brand names, offering a wide range of choices to tea-drinkers across the world.
1:24:24 - "I’m told that probably partly as a result of what is going on in Mombasa (Port), half of all the tea drunk in the UK comes to us from Kenya...even if it doesn’t originate in Kenya it comes through Kenya..."British Prime Minister Boris Johnson, UK-Africa Investment Summit held in London in January 2020.
Mombasa Tea Auction Goes Digital
Until now, putting lots of fine Kenyan tea under the gavel (hammer) and up for export was a noisy and very physical affair. Bidding echoed in rapid-pace across the theater-like auction room where selling brokers conducted the auction.
Each drop of the hammer by the auctioneer signified that a transaction in thousands of dollars had been concluded within a matter of minutes.
ITTS (Integrated Tea Trading System) the newly designed e-Auction system by EATTA and implemented by TradeMark East Africa is now in use. The various users of the system such as Producers, Brokers, Auctioneers, Warehouses, Packers, and Buyers have been provided with access to various functionalities of the system. Each member benefits through the system which integrates the process starting from the creation of invoices to the delivery of tea from the warehouses, enabling better control and avoiding duplication of work thus reducing time.
Mombasa Tea Auction Prices in 2020
Despite COVID-19 in the year 2020, Kenyan tea prices remained consistent in comparison to India and Sri Lanka.
In May, movement restrictions were put in place in India to contain the coronavirus outbreak leading to a jump in prices. Because of this, buyers moved to buy Kenyan CTC tea instead. India's tea output drops in 2020, lifts prices to a record high. Although Sri Lanka mainly deals in highly-priced single-origin and orthodox teas, the pandemic kept prices down for weeks after their initial pickup owing to economic factors in play.
Download full data on the 2020 Mombasa tea auction prices. Data compares the figures in India and Sri Lanka too as the prices typically influence each other on a weekly basis.
Mombasa Auction Registers Sale of Kenya Orthodox Tea
In an excerpt from STiR, a global business insight on Coffee and Tea, "The first Mombasa tea auction of 2020 saw the first-ever sale of a Kenya premium orthodox tea." The sale was a specialty brand from our very own parent company, Empire Kenya EPZ Ltd, auctioned for shipment to Poland. "The package distinguished it from the standard bulk teas, showing the “Big Five” wild animals associated with Kenya and aimed at helping promote tourism in Kenya."
The future of the Mombasa Tea Auction
Kenya recently introduced a new Tea Bill that requires all Black CTC Teas to be sold through the Mombasa Tea Auction. This puts a stop to all direct private sales and forward contracts.
Because of this, the platform will continue to retain its position in being one of the leading auction centres in the world, maintaining an edge over the other, with superior quality and prices.
With a variety that includes tea from Rwanda, Uganda, Malawi, Ethiopia, Madagascar, Tanzania, Burundi, Uganda, and Tanzania, leading tea Kenyan tea exporters meet international interests by obtaining supply contracts with CTC and orthodox importers, exporting African tea transparently and efficiently. As a company, we understand that every market is unique. For customised and weekly / monthly tea offers for your desired market, talk to us today for a reliable and consistent partner.