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Tea earnings up 12.4pc despite poor weather

CARTOON
By | January 26th 2012

By Macharia Kamau

Tea exports earned Kenya a record Sh109 billion last year, despite reduction in the amount of tea produced owing to poor weather.

The earnings went up 12.4 per cent, more than Sh97 billion the country got in 2010. The Tea Board of Kenya attributed the good earnings to higher tea prices and a weak local currency last year.

Production dipped five per cent to 377.9 million kgs of tea last year from the 399 million kgs produced in 2010. This was attributed to poorly distributed rainfall in the second half of last year, and hot and dry weather during the first half.

The downward trend in tea production is expected to continue this year, but high prices in major tea consuming markets is expected to see industry revenues grow.

Production has been projected to further drop by as much as 17 per cent in the first quarter due to continued poor weather and a frost bite that hit tea producing regions at the beginning of the year.

This is likely to affect the total output during the year.

"Due to dry weather spell from end of December last year, combined with incidences of frost that affected the tea growing regions at the beginning of this year, production for the first quarter is expected to be lower than last year," said Sicily Kariuki, Managing Director Tea Board of Kenya when the board announced the industry performance in Nairobi Wednesday.

"Production in the first quarter is likely to drop 17 per cent to 70 million kgs from 85 million kgs."

"Consequently, this is likely to affect production for the year by two per cent to 369 million kgs from 377 million kgs in 2011."

Earnings by the industry that has in the recent past surpassed tourism to be Kenya’s highest foreign exchange earner are expected to grow to Sh115 billion this year, up from Sh109 billion earned last year.

Traditional markets

"Over the years, the Kenya tea industry has relied on few traditional markets including Egypt, Pakistan, UK, Afghanistan and Sudan, which still account for over 70 per cent total tea exports," said Gideon Ndambuki, agriculture Assistant Minister during the briefing Wednesday.

"Deliberate efforts are on-going to develop emerging markets which are increasingly taking more of Kenyan tea. These include China, Iran, United Arab Emirates, Russia and North America."

Countries in the Middle East, Asia and Eastern Europe are among the key growth markets, with exports to UAE growing 64 per cent, China 68 per cent and Russia 44 per cent over the last five years.

Exports to Iran have grown five fold since 2007 to 5.4 million kgs in 2011 from 1.1 million.

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