The Mombasa Tea Auction will operate for five days a week aimed at enhancing its capacity to handle all tea produced in the country and the region.
This will come into effect once the auction regulations are enacted as stipulated in the Tea Act 2020.
According to The Crops (Tea Industry) Regulations, 2020, the sale of tea to the export market is exclusively through an electronic auction process.
Section 36 of the Auction Process:
(3) An auction organizer shall establish an electronic trading platform for the auction of tea that will be usable and accessible to all players in the value chain.
(4) A buyer shall pay in full the value of the tea bids they have won at the auction before collecting or taking custody of the tea.
The funds from the sale of tea at the auction shall be remitted directly to the respective factory accounts within 14 days from the auction date. Moreover, factories shall be required to deposit at least 50% of the funds to farmers’ accounts within thirty (30) days from receipt of proceeds, with the balance being paid as a bonus within the same financial year.
“It is important to note that tea auctions should now be held throughout the week and not necessarily the three days as currently designated by the East African Tea Traders Association (EATTA) Secretariat,” Agriculture Cabinet Secretary, Peter Munya said Friday while issuing a statement on the status of operations at the Mombasa Tea Auction and ongoing tea factories elections.
“All this is being done under the new tea reforms which are being instituted by the government for the benefit of enhancing accountability and transparency in the industry, even as some value chain players are vehemently opposing them,” Munya noted.
The Ministry of Agriculture says the Mombasa Tea Auction is the biggest black CTC (crush-tear-curl) tea auction in the world, handling tea from 10 producer countries with an average of 12 million kgs of tea sold weekly.
The tea auctions are held weekly – Mondays and Tuesdays with 51 or 52 auction sessions held in a year, but since the introduction of the online system, EATTA secretariat has designated three days in a week for auction trading.
TradeMark East Africa developed the automated system at a cost of Ksh 217 million.