Markets & Finance

Tea agency officials tour Russia in plan to grow export market

Tea Directorate officials are in Russia for talks on how to boost export after sales to the country dropped by 10 per cent last year.

Russia is a major buyer of Kenyan tea but last year the volumes dropped to 25 million kilogrammes from 28 million kilos in 2014.

Led by the director general of the Agriculture and Food Authority Alfred Busolo, the officials will be in the country for a week to cut trade deals that will improve the export of commodity to Russia.

“We need to increase the volume of tea that we export to Russia and that is one of the reasons why we are visiting the country to promote our commodity,” said Samuel Ogola, head of Tea Directorate.

Stable prices

Mr Ogola says that by increasing the volumes of tea to the Russian market, the prices of the commodity will be stable, which will enhance farmers earnings.

He noted that the current low prices at the auction is as a result of the dependency on a few traditional markets that buy almost the same volumes annually.

The price of tea is currently at Sh220 per kilo compared to Sh295 in similar period last year.

“The prices have been going down because we rely on a few traditional markets whose export volumes are almost constant,” he said.

Figures from the directorate indicate that exports to Pakistan, which is the country’s leading buyer of black tea, grew marginally by 0.6 per cent to 30.2 million kilogrammes from 30 million kilos in the first quarter of last year.

Volumes exported to Egypt between January and March this year though went up by 34 per cent to 24 million kilogrammes from 17. 8 million kilos last year.

Egypt has been one of Kenya’s major tea buyers but the volumes had dwindled in recent years due to political unrest in the northern Africa country, according to the tea directorate.

New markets

He said Kenya is trying to open up new markets and expand the existing ones such as China, which has potential to buy more of the local tea.

The earnings from tea grew to Sh125 billion last year up from Sh101 billion that was recorded the previous year.

Growers affiliated to the Kenya Tea Development Agency received Sh28.7 billion in the second round of payment for their produce in 2014/2015 compared to the Sh19 billion earned in a similar period the previous financial year.