Tea farmers to realize flat returns due to weak global prices

Written By: O'brien Kimani

Tea farmers to realize flat returns due to increased supply

Tea farmers are set to realize flat returns for their crop due to increased supply and weak global prices.

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The Tea Directorate quarterly report shows that production in Kenya improved by 17 percent from January to May this year.

However global prices remained feeble at an average of 270 shillings per kilo in the last six months according to weekly prices by the East Africa Tea Traders Association.

Global tea output has increased by 2.2 percent this year with the commodity raking in 40 billion dollars in 2017.

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Prices for the commodity remained tight at around 300 shillings per kilo.

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However improved productions in China, India and other top producers have dampened return prospects with the average price per kilo averaging 280 per kilo.

The tea production quarterly report for January to April this year indicates that production improved by 17 percent driven by better rainfall.

Data from the Tea Directorate indicates the volume of tea produced between January and May rose to 187 million kilos against the 160 million recorded in a similar period last year.

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Good production was recorded within the Plantation sub-sector with output increasing from 15.2 Million Kgs to 18.1 Million Kgs.

West of Rift output rose from 23 Million Kgs to 28 Million Kgs.

There was however a slight drop in production in the East of Rift Valley, with output dipping from 16.2 Million Kgs recorded in May 2017 to 15.32 Million Kgs owing to significant decline in rainfall compared to the same period of last year.

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Production within the Smallholder sub-sector increased marginally from 24 Million Kgs to 25.23 Million Kgs.

The total export volume for the period January-April 2018 was 153 Million Kgs compared to 146.5 Million Kgs recorded same period of last year.

Cumulative tea consumption for the four months period up to May 2018 stood at 13 Million Kgs against 12 Million Kgs for the corresponding period of 2017.


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