Kenya’s tea exports to the major markets dropped by 31 per cent in June compared with the corresponding period last year in what the regulator has attributed to reduced activity at the auction.
According to Kenya Tea Directorate, the volume exported in June stood 31.7 million kilos compared with 45.8 million kilos at the same time last year.
Decline in export demand led to low prices at the auction with a kilo on averaging Sh216 compared to Sh255 it attracted in the same period last year.
“Lower price to-date this year was attributed to reduced trading activities at the auction owing to uncertainties in certain key markets occasioned by political and economic instability,” said the directorate.
During the month, Kenyan tea was shipped to 49 export destinations compared with 52 for the same period last year.
Among the markets, Pakistan was the leading destination having imported 10.32 million kilos, accounting for 33 percent, to maintain its position as the leading buyer.
Other key destinations were Egypt (5.16 million Kg), UK (3.30 million Kg), UAE (2.19 million Kg) and Russia (1.80 million Kg).
Low global oil prices and currency devaluation in countries that are major buyers of the Kenyan tea have taken a toll on the price of the beverage, which has now settled at a five-year low of Sh190.
East African Tea Traders Association (Etta) said the factors have had a negative impact on disposable income of consumers leading to reduced purchasing power, hence low demand of the commodity.
Global tea production in 2018 increased by 0.68 percent to 5.81 billion kilos with Africa contributing 717 million kilos.
Global tea exports were 1.85 billion kilos with Africa’s contribution at 654 million kilos accounting for 35 percent.
Mombasa auction trades tea from over 10 other countries in Africa that include Rwanda, Uganda and Burundi.
The auction is currently the largest black CTC tea auction centre in the world and accounts for 32 percent of global tea exports.
Tea is one of the largest foreign exchange earners in Kenya contributing over Sh114 billion in 2013, Sh101 billion (2014), Sh124 billion (2015), Sh120.6 billion (2016), Sh129 billion (2017) and Sh140 billion in 2018.