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Commodities

Kenya eyes tea hub in China as exports fall

The value of Kenyan tea exports to China fell by more than a third last year despite rising popularity of milk tea which has increased demand for black tea leaves
The value of Kenyan tea exports to China fell by more than a third last year despite rising popularity of milk tea which has increased demand for black tea leaves. FILE PHOTO | NMG 

Kenya has set sights on opening up a distribution centre in China’s Wuyishan region — where some of the world’s most expensive teas are grown— in the wake of falling demand for Kenyan tea in the Asian economy.

The value of Kenyan tea exports to China fell by more than a third last year despite rising popularity of milk tea which has increased demand for black tea leaves, according to trade statistics.

The Kenya Export Promotion and Branding Agency (Keproba), says it’s looking at “a dedicated Centre for Kenya in Wuyi” as part of strategy to help small- and medium-sized enterprises “get their footings in the vast Chinese market”.

Kenya earned $3.17 million (Sh343.59 million ) from sale of black fermented and partly fermented tea to the world’s largest tea market in 2019, a 34.05 percent drop compared with a year earlier, the data kept by International Trade Centre (ITC) show.

This marked the first drop since 2016 when Kenya’s shipments amounted to $1.77 million (Sh191.85 million), before climbing to $2.5 million (Sh270.97 million) in 2017 and $4.81 million (Sh521.35 million) in 2018, statistics from the joint agency of the World Trade Organization and the United Nations further indicate.

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Keproba, the parastatal tasked with marketing Kenyan goods abroad said, sale of tea in the world’s most populous country, just like other fresh produce, has been hurt by an internal market that has an inbuilt capacity for supply of commodities and creation of demand for products produced in China.

Although China is the world’s largest producer of tea, it has increased importation of black tea in recent years on the back of increasing consumption of creamy (milk) tea blends which the country’s predominantly green tea cannot do.

This has caught the interest of the world’s leading black tea producers: India, Kenya and Sri Lanka.

News reports indicated Sri Lanka exported a record 11.8 million kilos of tea to China in 2019, driven by the rising consumption of milk tea.

China is not among Kenya’s top 10 tea destinations— dominated by Pakistan, Egypt, the UK, Sudan and Russia—but is seen as an emerging market with the biggest potential for expansion.

A Chinese delegation from Fuzhou Benny Tea Industry Company and the China National Forest Industry Federation Ecological Tea visited Kenya in August last year to scout for deals for export of Kenya’s specialty tea.

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