High-quality Kenyan tea attracts better prices amid reduced production, exports

KENYA – Farmers and factories producing high-quality tea in Kenya are set to benefit from improved prices, with “good” to “medium” quality categories drawing competitive bids at auctions.  

According to the Tea Board of Kenya (TBK) Chief Executive Officer (CEO), Willy Mutai, tea from smallholder factories managed by the Kenya Tea Development Agency (KTDA) fetched an average price of Kes366 (US$2.83) per kilogram for the main grades in October 2024.  

This marked a slight increase from Kes360 (US$2.78) during the same period in 2023. 

In contrast, “lower medium” and “plainer” teas, along with secondary grades, attracted less interest and lower prices, with some remaining unsold at auctions.  

Mutai noted that leaf grades generally achieved higher prices than dust and secondary grades, depending on their quality band. 

Auction sales volumes for Kenyan tea during October stood at 32.58 million kilograms, a decline compared to 38.63 million kilograms recorded in October 2023. 

While there was strong demand for tea offered at the auction, Mutai highlighted that prices were negatively impacted by higher supply levels. 

The global tea market continues to face challenges, including economic shocks linked to the Russia-Ukraine conflict, internal conflict in Sudan, and shipment disruptions through the Red Sea.  

These factors have affected demand for certain tea grades, reducing absorption rates. However, tea absorption under the main catalogue at the auction was relatively good at 69 percent. 

During October, TBK revealed Pakistan packers were active but selective in their buying, while Egyptian and South Sudan packers showed strong interest.  

Specialty tea production for the month reached 710,560 kilograms, representing 2 percent of total production. Orthodox teas accounted for 92 percent of specialty teas and were mainly produced by estates and independent factories. Other specialty teas included green and purple teas produced by cottage industries. 

Total tea production for October 2024 fell to 50.06 million kilograms from 52.79 million kilograms in the same month last year, attributed to low and poorly distributed rainfall. Precipitation levels in tea-growing regions varied, with areas west of the Rift Valley experiencing higher rainfall than those to the east. 

Despite the drop in October production, cumulative tea output for 2024 increased by 6.5 percent, reaching 495.23 million kilograms compared to 465.01 million kilograms during the same period in 2023.  

However, export volumes for October declined by 9.04 percent to 43.63 million kilograms, driven by reduced exports to key markets such as Pakistan and Egypt. 

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