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Tea output soars as prices tumble

By Correspondent | July 17th 2020

Green leaf production by factories affiliated to Kenya Tea Development Agency (KTDA) Holdings grew by 28.5 per cent for the year ended June 30, 2020, new data shows.

This saw the output for the year rise to 1.448 billion kilos, up from 1.127 billion kilos over a similar period last year. 

KTDA said in a statement yesterday the growth is as a result of continued favourable weather across tea-growing regions as well as improved crop husbandry practices among tea farmers.

The growth in output, however, came against the backdrop of a tumultuous second half of the year that saw global tea prices plummet on the back of oversupply in the market as well as disruptions occasioned by the Covid-19 pandemic. “These include reduced demand for tea across markets as well as the restrictions on the movement of goods and services across the world at the start of the pandemic,” said KTDA.

During the period under review, the unit price of KTDA-sold teas fell by 6.8 per cent to an average 12-year low of $2.42 (Sh256) per kilo compared to $2.59 (Sh274) per kilo last year.

This is the lowest KTDA average price since 2008 when the average price per kilo of tea at the auction was $2.17 (Sh230). 

In the last three auctions for the year ended June 2020, the average price for a kilo of tea at the auction dropped below $2 (Sh212), a scenario last seen in 2007. 

The trend in falling prices is replicated across other markets such as India and Sri Lanka as a result of oversupply and the disruption in the industry.

Farmers will now await the final payout for the year, which is expected to be adversely affected by the prevailing market conditions.

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