Erratic rains have squeezed tea production by 16.2 per cent in the first half of the year even as official statistics indicate growing demand for Kenya’s produce in the domestic and international markets.
The country produced a total of 178.4 million kilogrammes of tea in the first six months of 2011 compared to 212.4 million kilogrammes in the same period last year, Tea Board of Kenya’s (TBK) half-year results show.
Output from smallholder farmers contracted by 124.3 million kilogrammes to 105.8 kilogrammes as plantations produced 72.6 million kilogrammes— a 18 per cent dip over last year’s.
In Kenya, the small holder segment normally accounts for 59 per cent of the total production, with the enterprises producing and processing tea and branding it for the domestic market.
TBK managing director Sicily Kariuki said in spite of production decline, consumption of tea has grown steadily in the last six months as packers intensified brand promotional activities to meet expectation of health conscious customers
“In addition to traditional tea, high value teas for accelerating life pace have become new favourites of the market.” Mrs Kariuki said Thursday.
In the domestic market, tea consumption grew by more than 16 per cent in the period ending June 2011 to stand at more than 10 million kilogrammes, up from 8.6 million kilogrammes consumed within the same period last year.
Mrs Kariuki also attributed the growth To TBK’s sustained strategy of promoting tea drinking for better health.
She added: “Allowing factory gate sales have also worked for us, providing an awareness platform and encouraging repeat sales at the grassroots level.”
At the global market, Kenya’s tea won more export markets in the first six months of 2011, bringing to 48 the number of export destinations.
Pakistan remained the single largest importer accounting for 40.1 million kilogrammes followed closely by Egypt which absorbed 36.9 million kilogrammes of the country’s tea exports in the first half of this year.
The recent wave of political upheaval in Arab countries affected Egypt and increased smuggling of commodities into the Afghanistan.
TBK said the country shipped 211.7 million kilogrammes of the brew in the first half of 2011, with exports level falling by almost 2.5 per cent to 211.7 due to political upheaval in North Africa.
Peter Kimanga, tea manager at Global Tea & Commodities Ltd, says the shift to value added tea also has the potential to lift the local tea industry to new levels, raising its export volumes to 500,000 tonnes.
“Market for value added tea has been steadily opening in Sudan and Yemen, UK and Somalia,” Mr Kimanga said in an earlier interview
Thursday, TBK said the supply of Kenya’s tea remained critical in the international market and was one of the important forces that kept prices at $2.98 per kilogramme which held steadily for months.
The Board predicts that the country’s tea output and export volume will rise in 2011/12 even as competition in the international market intensifies.