The country’s tea industry earned Sh125.25 billion from exports in 2015. This becomes the highest export earning ever, marking an increase of 23 per cent from the Sh101 billion recorded in 2014, the Agriculture, Fisheries and food Authority (AFFA) said yesterday.
Kenya is the world’s leading exporter of black tea, making it a major foreign exchange earner.
Tea earnings from the domestic market stood at Sh14.6 billion, which represents seven per cent of the total production. This brought the total tea industry earnings to Sh139.8 billion.
AFFA Interim Director General Alfred Busolo said the improved earnings are as a result of better prices last year, where a kilogram of tea fetched $2.98 (Sh303) compared to $2.16 (Sh219) per kilogram in 2014. This was the highest average price recorded at the Mombasa auction.
- READ MORE
- Kenya's shilling hits new record low
- Shilling projected to steady while some currencies limp
- Sh78b IMF facility lifts forex reserves
- Central Bank takes regulatory action against Absa Bank
The industry was also further buoyed by the value of the US dollar, which exchanged at a high of over Sh100 to the dollar.
Small-scale farmers benefited from a payout of Sh43.3 billion for the year 2014-15, which represents 71 per cent of the earnings by the sub-sector for that period, compared to Sh35.6 billion for the year 2013-14.
Kenyan tea found its way into 68 markets internationally, with the top five destinations accounting for 72 per cent of the total exports. The markets were Pakistan with 26.2 per cent, Egypt 17.4 per cent, United Kingdom 10.1 per cent, Afghanistan 9.3 per cent and United Arab Emirates at 8.5 per cent.
Another market that is positioning itself to welcome Kenyan tea is Iran, after the US lifted economic sanctions on it and allowed it to trade freely. Busolo said prior to the sanctions, Iran had emerged as one of the fastest growing export destinations for Kenya tea. “The industry will seize the opportunity to resume trade with Iran with a view to enhancing earnings to farmers,” he added.
However, the industry performed dismally in terms of production in 2015, with 399.21 million kilogrammes being produced. This was a 10 per cent decrease compared to 2014, when 445.1 million bags were produced. This was a result of the dry weather witnessed in the first quarter of the year between December 2014- May 2015.
Small-scale farmers produced 60 per cent of the total output, which stood at 237.6 million kilogrammes. However, this was a 9.4 per cent drop compared to the 262.4 million kilogrammes produced in 2014.
Large scale producers recorded an output of 161.6 million kilogrammes, accounting for 40 per cent of the total production. This again was a decrease of 11 per cent compared to 2014 when the sub-sector produced 182.7 million kilogrammes.
Despite the drop in production, export earnings have grown by 28 per cent and this has led to increased earnings for the farmers.
The Ministry of Agriculture Livestock and Fisheries wants to address the challenge of low earnings by first giving out 150 000 bags in form of fertiliser subsidies to farmers, and a cash subsidy to Kenya Tea Development Authority (KTDA) of Sh450 million.