28 Jun

Kenya’s tea export grew by 20 percent in the first quarter of the year backed by good prices, which helped to offset a significant decline in volumes. Data from the Kenya Tea Board (TBK) shows Kenya earned Sh41.1 billion in the period under review when compared with Sh34.3 billion that was realised in the corresponding period a year earlier. The volumes of tea exported in the review period declined by 17 million kilogrammes to 135.4 million Kilos. The good price that the beverage fetched in the review period, which stood at Sh303.8 a kilo on average, against Sh223.8 on, lifted the overall earnings, compensating for the low volumes. “The decline in export volume was majorly due to the effect of the Russia-Ukraine crisis that caused a global economic recession and thus negatively affecting commodity markets,” said TBK in the monthly report. All the top export markets for Kenyan teas recorded a decline, underlying the danger that the country is staring at in overreliance on specific buyers.  For instance, Pakistan- Kenya’s number one buyer recorded a decline of five percent in the first quarter of this year after shedding off two million kilos. Egypt and Russia exports declined by three and six percent respectively. Kenya’s top 10 buyers accounted for 88 percent of the total tea volume that was sold to the world market. Of the top five buyers, it is only Sudan that recorded an increase in volumes, which grew significantly by 22 percent. The growth in volumes to Sudan could be attributed to the move by Nairobi and Khartoum to resolve a three-year standoff over the shelf life of tea that had previously impacted negatively on volumes that could be shipped there. Russia is Kenya’s fifth-largest buyer of tea in terms of volumes and the current standoff saw it drop to position 11 in March, trailing emerging markets such as Nigeria, Poland and Afghanistan. All the top buyers of Kenyan teas are either in financial turmoil or experiencing political instability. For instance, Pakistan is currently in serious economic woes that have seen the government advise its citizens to cut down on tea consumption. Sudan has not been politically stable since the previous regime was overthrown. 

Source: Business Daily