Rwanda tea prices at the weekly Mombasa auction market rose smoothly this week compared to last week due to high demand that resulted from low supplies, according to Ocir-Thé.

The Rwanda tea authority said that tea prices from all factories averaged $2.96 (Rwf1,337) per Kilogram in the auction held on August 11, to $3.13 (Rwf1,766) per Kilogram in the August 18 auction.

"The average increase is attributed to the low supply while there is a high demand at the international market and also production has fallen following an unfavourable weather condition in the country,” said Francis Twagirayezu, an official who represents Ocir- Thé at the Mombasa auction market.

In the past three months of 2009 the Mombasa auction market through which a host of African countries sell their teas registered an average price of $2.22 (Rwf1, 252.97) per Kilogram compared to $2.21 (Rwf1, 247.32) in the first four months of the year.

Twagirayezu said that Rwanda offered 109,932 Kilograms for auctioning this week but only 7,776 Kilograms were not sold.

"This means that Ocir-Thé is doing well and they are planning to increase the total volumes offered for next week’s auctioning by five percent,” he added.

On the international market, tea prices have been risen slightly because of a fall in production following unfavourable weather conditions in India while the demand for the commodity in Europe is strong.

About 62 percent of Rwanda’s tea is sold thought the weekly Mombasa auction market. Only 37 percent is through direct sales while the remaining one percent is collected from local sales.

In the first half of this year, Rwanda’s tea revenue earnings showed a slight increase of 1.2 percent to Rwf22.95 up from Rwf22.66m in the same period last year, becoming Rwanda’s top export revenue earner.

All the country’s main exports recorded significant declines in value.

Rwanda earns most of its foreign exchange from exporting agricultural traditional commodities like tea, cotton, coffee and sisal.

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