Small-scale tea farmers in Kenya are still facing losses despite the removal of the minimum price at the Mombasa auction, a move that has failed to boost both prices and purchased volumes from the old stocks.

Data from the Mombasa auction shows that of the 8.97 million kilogrammes of the old tea offered last Tuesday, only 923,910 kilos were sold, meaning 89.7 percent of the offering was rejected by buyers.

The commodity belongs to Kenya Tea Development Agency (KTDA), which represents over 600,000 small-scale farmers.

Two weeks ago, the Mombasa auction, the world's second-largest tea trading platform, scrapped the minimum price following government intervention and calls from stakeholders in order to boost sales.

The minimum price, set in 2021 at $2.34 per kilo for KTDA tea destined for export, was meant to protect farmers from losses, but it left them with significant volumes of unsold stock. Farmers struggled with over 100 million kilos of unsold tea under the minimum price regime, impacting cash flow in the factories.

Brokers had cited concerns about the gap between price and quality, which has led buyers to favour higher-grade teas over KTDA offerings. Critics argued that tying the minimum price to production costs, rather than the market value of tea, was a misstep.

Industry experts stressed that setting a uniform price across the board is unfeasible given the varying quality of teas from different regions.

"Auction prices should reflect the inherent differences in quality between teas from the east and west of Rift regions," said one tea trader, pointing to the imbalance caused by the previous pricing structure.

The rigidity of the minimum price rule had driven buyers towards premium teas, leaving large quantities of KTDA tea unsold at the auction.