Kenya posts highest tea earnings in five years as production increases

KENYA – Kenya’s tea farmers earned US$1.4 billion in 2018 as a result of production recorded in the year despite a decline in the average prices of the commodity at the international market.   

In 2018, the tea revenues rose to the highest recorded in the past five years representing an 8.5% growth by US$110 million when benchmarked to the 2017 revenues.

Increased production was the major driving force as the country posted 474 million kilos in 2018 compared to 415 million kilos exported in 2017.

However, the Kenya Tea Development Agency (KTDA) projects low earnings for tea farmers this year following a 17% drop in the price of the beverage in the first half of the 2018/2019 financial year.

According to the Tea Directorate, 2019 volumes are expected  to hit 416 million kilogrammes while the average auction price will surge to US$2.79 a kilo up from US$2.59 achieved in 2018.

During the season under review, Kenya’s tea earnings increased by 9.4% compared to the previous season’s income of US$770 million despite kilo of green leaf fetching about US$.51 (Sh52.51) in the last season compared to US$.58 (Sh58.61) in 2017.

“Kenya tea production is expected to come to about 416 million kilos this year, down from what was produced in 2018, which is largely attributed to dynamics in the weather conditions in tea growing zones,” says the directorate.

Additionally, The KTDA Holdings revenues for the period ending June 30, 2018 rose by 13.4% to US$25.5million.

This year local sales are expected to grow by 5% to 40 million kilogrammes, boosting the domestic earnings from the beverage to US$180 million compared with US$160 million earned last year.

The commodity traded at the lowest price for the past 18months selling at US$2.29 a kilogramme reflecting a four-year low at the Mombasa auction.

In the weekly trading held last week at the Mombasa auction, a kilogramme of processed tea on average fetched US$1.99 down from US$2.69 on average in the corresponding period last year.

Tea and horticulture remain the leading export earning commodities in the country.

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