In the recent Mombasa Tea Auction, the Kenya Tea Development Agency (KTDA) faced backlash as traders rejected 9.8 million kilograms of tea, accounting for 52% of the total offered. This rejection stemmed from KTDA's decision to impose reserved prices, leading to price-quality disparities that left traders dissatisfied and caused significant withdrawals from the auction.
KTDA's directive to sell tea at the government-set minimum price of US$2.43 per kilogram met resistance from buyers due to concerns over quality and pricing inconsistencies. This move, intended to alleviate warehouse congestion and enhance liquidity, backfired as it resulted in widespread market disruptions and increased unsold tea volumes at the auction.
Industry experts and smallholder tea factory directors in Mt Kenya have raised concerns about the resurgence of cartels in the sector, alleging interference with government reforms aimed at boosting tea farming and fair compensation for growers. Despite improvements in farmers' earnings, dissatisfaction with the Tea Board of Kenya's involvement in KTDA-managed smallholder factories persists, posing challenges to the tea industry's stability and growth.
