First quarter tea output rises by 19pc, hurts price

Workers picking tea. FILE PHOTO | NMG

What you need to know:

  • Data from the Tea Directorate indicates the volume between January and April rose to 144 million kilos against 121 million kilos recorded in the same period last year.
  • The increase was largely attributed to the onset of rains, in turn pushing prices to a three-year low.
  • The average price for the period was lower at Sh284 per kilo compared with Sh300 for the same quantity in the corresponding period of 2017.
  • Last month, 34.41 million kilos of tea was sold through the auction against 25.33 million kilos in April 2017.

Tea production in the first four months of the year improved by 19 per cent compared with same period last year, but has impacted negatively on price at the auction.

Data from the Tea Directorate indicates the volume between January and April rose to 144 million kilos against 121 million kilos recorded in the same period last year.

The increase was largely attributed to the onset of rains, in turn pushing prices to a three-year low.

“The long rain season was experienced both at the East and West of the Rift,” says the directorate in the monthly report.

The average price for the period was lower at Sh284 per kilo compared with Sh300 for the same quantity in the corresponding period of 2017.

Last month, 34.41 million kilos of tea was sold through the auction against 25.33 million kilos in April 2017.

The auction had started at a high of Sh270 in the first sale of the year but the prices have in the last two months oscillating between a two- and three- year low.

Poor prices point to low earnings for farmers in the next financial year, especially on their second payment that is normally done at the end of calendar year.

Growers affiliated to Kenya Tea Development Agency earned Sh42 billion as the second payment last year. This was lower by Sh2 billion when compared with a record high of Sh44 billion in 2016.

The country exports the bulk of its teas to Egypt, UK, Pakistan, Afghanistan, Iran, Sudan, Yemen and UAE. 

The directorate has been pushing for increased local consumption to cut the reliance on exports in order to boost the price of the commodity in times of glut.

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Note: The results are not exact but very close to the actual.