Kenya's weekly tea auction suffered a serious lack of demand this week pushing prices lower, as buyers from its largest tea market Pakistan stayed away, traders said on Wednesday. Traders said about 18 percent of the main catalogue's 127,809 packages did not find buyers and were withdrawn. "It was a very, very weak market yesterday," Norman Wilson, the managing director of leading traders Africa Tea Brokers (ATB), told Reuters.

"The Pakistan Bazaar were not there, they were showing much less interest." Pakistan officials have complained bitterly after Kenya sharply increased duty tariff on rice imported to Kenya from about 35 percent to 75 percent.

Kenya has been forced to increase the import duty on rice to comply with a new East African Community custom union, which came into effect on January 1. Traders said most Pakistan retail buyers had withdrawn from the tea auction held on Tuesday concerned about a threat by Pakistan authorities that they are going to retaliate by raising duty on Kenya's tea from 33 percent to 75 percent unless Kenya reverts to the previous duty.

Copyright Reuters, 2005