Tea export earnings are projected to rise by Sh5 billion this year resulting from low volumes and high auction prices. The Tea Directorate forecasts volumes will this year drop to 435 million kilos from a high of 450 million kilos realised last year.
The decline, says the directorate, will see the average auction price surge to Sh280 a kilo up from Sh260 achieved in 2018.
“Kenya tea production is expected to come down to about 435 million kilos down from 450 million produced in 2018, which is largely attributed to dynamics in the weather conditions in tea growing zones,” says the directorate.
At the same time, export volumes are expected to come down to 420 million kilos compared with 423 million exported last year.
Local sales are expected to grow by five per cent to 40 million kilogrammes, boosting the domestic earnings from the beverage to Sh18 billion compared with Sh16 billion earned last year.
The price of tea at the Mombasa auction has been on a decline since June 2017 when it stood at Sh230 a kilogramme.
In the trading held in the last week of December, a kilogramme of processed tea on average fetched Sh218 down from Sh220 the previous week. This was the lowest price since June 2016.
East African Tea Traders Association (Eatta) managing director Edward Mudibo says though prices have been coming down, they have not reached the alarm stage.
“Generally prices have been coming down but we anticipate they should not be moving to below Sh200; that is when we shall be worried,” said Mr Mudibo.
Reduced earnings from tea has seen the commodity outpaced by tourism to become number two in revenue generation.
Tea usually comes number two after diaspora remittance. Most of the Kenyan tea is sold in the world market with the country consuming just about five per cent of the total production.