Tea prices up but production dips on bad weather

Margret Wanjugu picks tea at her farm in Tetu, Nyeri, in March, 2022. [Kibata Kihu, Standard]

Tea prices rose 30.6 per cent over the first six months of the year even as farmers grappled with lower volumes due to poor weather conditions.

Tea sold at the auction in Mombasa went for $2.56 (Sh307) per kilo over the half year, compared to $1.96 (Sh235) per kilo over a similar period last year.

The prices in the first half of 2022 were also higher than in 2020 and 2019.

This could be an indication that the export markets have recovered from the impact of the Covid-19 pandemic, although the Russian-Ukraine crisis is threatening to erode the buying power of consumers in these markets, which could affect Kenya's tea exports.

According to the Kenya Tea Board, the production dropped slightly owing to poor rains over the long rains season.

"During the six-month period for the year, average auction prices for Kenya tea stood at $2.56 (Sh307) per kg, which was significantly higher compared to $1.96 (Sh235) for the same period of 2021, $2.05 (Sh246) in 2020 and $2.22 (Sh266.40) in 2019," said the board

It added that teas from the small-scale farmers mostly marketed by the Kenya Tea Development Agency (KTDA) fetched higher prices at Sh330 per kilo for the sought-after high-quality grades.

"During the period, tea offered for sale by smallholder tea factories fetched an average price of $2.75 (Sh330) per kg for main grades from an average of $2.14 for January-June 2021 and $2.24 for the same period in 2020."

The higher prices might, however, not persist throughout this year, with the board noting that the major markets for Kenyan tea have been greatly affected due to the shocks on their economies owing to the Russian-Ukraine war.

"Though the auction prices have been on an upward trajectory after experiencing a declining trend to a low of $1.75 (Sh210) per kg in July 2021 occasioned by the effects of the Covid-19 pandemic, the auction prices during the second quarter of 2022 have slackened due to the effect of the global economy shock brought about by the Russian-Ukraine crisis," said the tea board.

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