Kenyan tea exports fall Sh10bn in Q1

What you need to know:

Earnings fell to Sh30 billion from Sh40 billion a year earlier.
Tea prices have been at the bottom since the beginning of the year due to high production.
KTDA has already issued a warning that more than 600,000 of its affiliate farmers would be affected this year as a result of low market prices.

The value of Kenyan tea exports fell Sh10 billion in the first quarter of the year on account of depressed prices that affected earnings.

A Tea Directorate monthly report shows earnings dipped from Sh40 billion in the previous season to Sh30 billion in the review period, pointing to low final earnings for farmers in the current financial year.

Tea prices have been at the bottom since the beginning of the year due to high production.

“The average auction price for the period January-March 2019 stood at Sh220 per-kilo compared with Sh291 for the same quantity recorded in a similar period of last year. Lower prices to-date this year was attributed to increased supply,” says the report.

The total export volume for the month of March 2019 was 44.73 million kilos compared with 35.77 million recorded in the same period last year, representing a 25 percent increase.

During the month, Kenya shipped its tea to 43 export destinations compared to previous 52 destinations.

Warning

Pakistan was the leading export destination for Kenyan tea having imported 17.51 million kilos, accounting for 39 percent of the total exports.

Kenya Tea Development Agency (KTDA) has already issued a warning that more than 600,000 of its affiliate farmers would be affected this year as a result of low market prices.

The average price of the KTDA teas in the first nine months of 2018/19 declined to Sh262 per kilogramme from Sh325 for the corresponding period of 2017/18.

The agency says turbulence in the international markets such as economic sanctions imposed on Iran by the US and high inflation rates in Egypt also negatively impacted the tea market.

In October 2018, the agency announced record farmer income of Sh85.74 billion from the sale of tea supplied by smallholders. A total of Sh62.35 billion, representing 74 percent of income, was paid out to farmers as monthly and second payments.