African tea prices rise

African tea prices rose 4.1 percent to a record at a weekly sale in Mombasa as a drought in Kenya, the world’s biggest exporter of black tea, curbed yields.

The average price rose to $2.80 a kilogram (2.2 pounds) at the sale held Aug. 10 and 11, from $2.69 a week earlier, Mombasa, Kenya-based Africa Tea Brokers Ltd. said in an e-mailed statement today. Tea has traded at an average of $2.31 in the year to date.

Drought in Kenya is also reducing production of other crops including corn and has curbed electricity production from dams. The government has said the nation’s 2009 economic growth target is under threat from the dry weather.

This week’s record tea price is higher than the $2.72 average attained on July 13 and 14 and compares with last year’s record of $2.70.

Of the 4.85 million kilograms (10.67 million pounds) on offer this week, 94 percent was sold. Next week, 5.28 million kilograms of the leaf will be offered and 4.99 million kilograms the week after, Africa Tea said.

The weekly auctions in Mombasa sell tea from most African producers excluding South Africa and countries in West Africa. Tea is also sold at auctions in Colombo, Sri Lanka, and at sales in Malawi, India and Indonesia.

Source: Bloomberg