Kenya monthly tea exports plunge 31% on reduced auction activities

KENYA – Kenya, world second largest tea exporter, reported a 31% decline in tea export in June this year, recording 31.7 million kilos in exports from 45.8 million kilos exported at the same time last year.

According to the Kenya Tea Directorate, the significant decline was attributed to reduced activity at the auction.

Decline in export demand led to low prices at the auction with a kilo of black made tea selling at an average of US$2.1 (Sh216) compared to US$2.147 (Sh255) it attracted in the same period last year, reports Business Daily.

“Lower price to-date this year was attributed to reduced trading activities at the auction owing to uncertainties in certain key markets occasioned by political and economic instability,” said the directorate.

Low global oil prices and currency devaluation in countries that are major buyers of the Kenyan tea have taken a toll on the price of the commodity, which has now settled at a five-year low of US$1.84 (Sh190).

East African Tea Traders Association (Etta) said the factors have had a negative impact on disposable income of consumers leading to reduced purchasing power, hence low demand of the commodity.

During the month, Kenyan tea was shipped to 49 export destinations compared with 52 for the same period last year.

Among the markets, Pakistan was the leading destination having imported 10.32 million kilos, accounting for 33 percent, to maintain its position as the leading buyer.

Other key destinations were Egypt at 5.16 million Kilos, UK importing 3.30 million Kilos, UAE at 2.19 million Kilos while export to Russia amounted to 1.80 million Kilos.

Global tea production in 2018 increased by 0.68 percent to 5.81 billion kilos with Africa contributing 717 million kilos.

Global tea exports were 1.85 billion kilos with Africa’s contribution at 654 million kilos accounting for 35 percent.

Mombasa auction trades tea from over 10 other countries in Africa that include Rwanda, Uganda and Burundi.

The auction is currently the largest black CTC tea auction centre in the world and accounts for 32 percent of global tea exports.

Tea is one of the largest foreign exchange earners in Kenya contributing over us$ 1.11 billion (Sh114bn) in 2013, US$980 million (Sh101bn) in 2014, US$1.2 billion (Sh124bn) in 2015, US$1.17billion (Sh120.6bn) in 2016, US$ 1.25 billion (Sh129bn) in 2017) and US$1.36 billion (Sh140bn) in 2018.