Kenya: No Respite as Strong Shilling Hurts Tea Sector
The Kenya shilling appreciated by six per cent from an average of Sh71 recorded in May last year to Sh67 last month, reducing tea export earnings for farmers by the same margin. This was worsened by falling international tea prices. `The situation has resulted into reduced earnings to growers,` Tea Board of Kenya Managing Director, Mrs Sicily Kariuki says.
The average auction price for Kenya tea dropped by 23 per cent from $2.14 to $1.65 per kilogramme (kg) last month. `Over the last two decades, the auction prices per kg have been depressed at between $1.50 and $2.50 due to the over supply situation in the world tea market,` Kariuki said in a statement.
The average export unit price dropped by 21 per cent from $2.16 $ 1.78 per kg last month.
However, local tea sales are rising due to increasing consumption of the beverage. During the month of May, local consumption grew by 50 per cent from 1.4 million kg recorded the same period last year to 2.1 million kgs.
The Board says tea packers registered the highest growth in sales volume of 56 per cent from one million to 1.5 million kgs, while factories registered an increase of 37percent in local tea sales from 0.4 million to 0.55 million kgs.
`The impressive growth in local tea consumption was attributed to impact of the on-going Generic Promotion Campaign by the Board in partnership with tea packers and producers,' she said.
The campaign is aimed at positioning tea on a health platform with a view to raising the local tea per capita consumption from the current level of 0.5kg to about one kg.
Meanwhile, favourable weather conditions characterised by well distributed rainfall bolstered May production, with output rising by 21 per cent from 26 million kgs recorded in May last year to 32 million kgs last month.
Based on historical data, KTB says, monthly tea production for June, July and August is projected to fall by 10 per cent compared to the output for May due to onset of the cold season beginning this month.
Some 82 per cent of tea produced was traded through the Mombasa Tea Auction while the balance was sold through private treaty locally and overseas. Pakistan, United Kingdom and Afghanistan remained the key buyers of Kenyan tea.
Source: allafrica.com