KENYA
A $1.5 million upgrade announced by the East African Tea Trade Association (EATTA) will for the first time automate the world’s highest volume tea auction.
Mombasa is a critical hub for black tea as it aggregates the production of 10 African countries. Buyers are concentrated in five countries that purchase 75% of the tea. Traders in neckties who address each other as “sir” currently employ an “outcry” method to place and close bids, an inefficient and exclusionary means of price discovery.
Gideon Mugo, ETTA vice-chairman said technicians are in the final stages of rolling out a prototype that will “wholly computerize the auction process.” ETTA, a non-government association of 190 traders founded in 1956, operates the auction. Work will be complete within the next few months.
Expanding bidding to include online buyers is expected to cushion farmers from reduced earnings as a result of surplus production. Auctions worldwide report lowered warehouse expense and greater transparency.