What is the Mombasa Tea Auction?
The Mombasa Tea Auction serves as one of the largest tea trading platforms globally, playing a pivotal role in setting tea prices around the world.
Located in Kenya, one of the leading tea-producing countries, this auction is a hub where buyers and sellers convene online to trade CTC (Crush, Tear, Curl) Kenyan tea such as BP1, PF1, PD, Dust, Fannings, and BMF.
As the only multi-origin auction centre handling tea from 10 producer countries (Kenya, Uganda, Tanzania, Rwanda, Burundi, Democratic Republic of Congo, Malawi, Madagascar, Mozambique and Ethiopia), an average of 14Million kgs of tea is offered and almost 11Million 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, Yemen, and in emerging markets such as Indonesia, Mexico, Ghana, and Australia.
How Does it Impact Global Tea Prices?
The Mombasa Tea Auction has a considerable influence over global tea prices. Given Kenya's status as a major tea exporter, the outcomes of this auction ripple throughout international tea markets and the auction's outcomes influence tea prices worldwide.
While external factors like weather patterns, currency fluctuations, and shifts in global demand can exert significant pressure on prices, we are proactive in managing the auction's pricing dynamics by closely monitoring and anticipating these changes.
Additionally, we diligently track and manage anticipated world affairs that may affect the tea market, taking measures to mitigate any disruptions within our control. Our unwavering commitment to stability and consistency in our tea offerings ensures a reliable and satisfying experience for our customers.
A timeline of Kenyan Tea Trading through Public Tea Auctions
Understanding the Mombasa Tea Auction Process
The Mombasa Tea Auction Process unfolds over two consecutive days, with secondary grades auctioned on Mondays and primary grades on Tuesdays. The intricate logistics for each auction commence two and a half weeks prior to the sale date.
Designated tea brokers, including the Kenya Tea Development Agency (KTDA), which oversees small-scale farmers, and other tea producers, play a pivotal role in the process. They distribute samples weighing between 50-80 grams of each tea lot/invoice to prospective buyers.
Buyers (Kenyan tea exporters authorised by East African Tea Trade Association) like our parent company, meticulously evaluate these samples, assessing them visually, by aroma, texture, and taste. This assessment guides them in determining the price range within which they will bid for the teas at the auction.
Once purchased, exporters ship the tea either in bulk directly to clients, where it is often resold for retail, or to specialised blending and packaging companies. These companies then package the tea under various brand names, offering a diverse range of Kenyan tea blends to tea drinkers worldwide.
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 Embraces Digital Transformation
Previously, the process of auctioning fine Kenyan tea for export was a bustling and physically intensive affair. The auction room echoed with the rapid-paced bidding conducted by selling brokers, resembling a theater-like atmosphere.
Each decisive drop of the auctioneer's hammer signified the conclusion of transactions worth thousands of dollars within mere minutes.
However, with the introduction of the Integrated Tea Trading System (ITTS), a newly designed e-Auction system developed by EATTA and implemented by TradeMark East Africa, the landscape has undergone a digital revolution.
This innovative platform has provided various stakeholders, including producers, brokers, auctioneers, warehouses, packers, and buyers, with access to a multitude of functionalities, enabling better control and avoiding duplication of work thus reducing time.
Kenyan Tea Figures: 2023 Insights and 2024 Projections
In 2023, Kenya maintained its position as one of the top tea producers globally. The country's tea industry witnessed steady growth, with production reaching 570.26 million kgs, a notable increase from 535.04 million kgs in 2022. This growth was largely attributed to favorable weather conditions during the rain season.
Looking ahead to 2024, production is projected to continue increasing, driven by favorable weather conditions in the tea-growing regions of the East and West of the Great Rift Valley.
However, challenges such as fluctuating market conditions, exacerbated by global economic shocks from the Russia/Ukraine war and other civil conflicts in some of our major tea markets, as well as increased supply due to favorable weather and applied fertilizers, are poised to negatively impact tea auction prices.
Despite these challenges, the Kenyan tea industry remains optimistic about further expansion. Key to this growth will be a continued focus on quality production and the exploration of new markets. Kenyan tea stakeholders are committed to these endeavors, which are crucial for the industry's sustained success."
View more statistics on the Mombasa tea auction prices over the last couple of years. 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 Kenya premium orthodox tea." However, it's noteworthy that Kenya orthodox tea is no longer sold at the auction. Most orthodox tea producers now ink direct deals with exporters, allowing us to sell tea directly to our customers, which greatly benefits the tea farmers.
The sale mentioned in the excerpt was a specialty brand from 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, with more work being put to improve on the quality of Kenyan tea for better prices on the world stage.
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.
Our Commitment to Quality through the Mombasa Tea Auction
The Mombasa Tea Auction serves as a vital cog in the global tea trade, influencing prices and shaping the industry's landscape.
We understand the importance of sourcing the finest teas to create exceptional blends for our customers. We take pride in our meticulous selection process, ensuring that only the highest quality teas make it to our inventory.
By being an active participant in the Mombasa Tea Auction and working closely with trusted suppliers, we guarantee that every blend we offer reflects our dedication to excellence
As you navigate the world of tea procurement, let us embark on a journey of discovery through the enchanting world of tea.
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