Tea earnings projected to rise by 5pc

Kenya’s tea earnings are projected to rise 5 percent this year to 135 billion shillings, up from 129 billion shillings recorded last year.

The Agriculture and Food Authority’s Tea Directorate says Kenya is likely to produce a total of 452 million kilograms of tea this year on account of good weather conditions.

Export volumes are estimated to hit 423 million kilograms.

Persistent drought last year had a substantial negative impact on the agriculture sector which hosts some of Kenya’s top foreign exchange earners such as tea and coffee.

For instance, between January and December 2017, tea production slumped 7% to 439 million kilos down from 473 million kilos recorded in 2016.

As a result, export volumes also reduced to 415 million kilograms from 480 million kilos recorded in 2016.

According to AFA, this decline in export volume was attributed to lower supply.

Drought experienced last year affected output as factories also recorded reductions in deliveries from farmers.

The Ksh 129 billion in export earnings recorded last year was the highest in five years rising from Ksh 120 billion recorded in 2016.

This was as a result of higher unit prices, a stable exchange rate as well as sustained demand in key and emerging markets.

In 2017, Pakistan was Kenya’s top tea destination, followed by Egypt, UK, the UAE, Sudan and Russia.

Locally, 37 million kgs of tea were consumed in 2017, compared to a consumption of 29 million kgs the previous year.

The value of tea consumed in the domestic market in 2017 hit 15 billion shillings, a rise from the 12 billion shillings recorded in 2016.

The Tea Directorate is now upbeat of a better performance this year, projecting that export earnings will rise 5% in 2018 to 135 billion shillings while total output is expected to top 452 million kgs supported by good weather conditions.

According to the directorate, export volume could also rise to 423 million kgs this year up from 415 million kgs a year ago.

The Tea Directorate further projects an increase in price per kg at the Mombasa Tea Auction which is expected to rise to 3 dollars per kg from 2 dollars and 98 cents recorded last year.

  

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