Kenya’s tea export earnings dip by 26% in March on loss of key markets

KENYA – Kenya’s tea exports in the month of March this year have declined 26% when compared to same period last year as volume of shipment reduced to 44.43 million kilograms from 59.77 million kilograms recorded in March 2021.

The Tea Board of Kenya (TBK) attributes the decrease to the Russia-Ukraine conflict which has affected shipments since February 22, 2022 when the war begun.

The March exports were also lower when compared to February when Kenya exported 45.12 million kilograms of tea, reports KBC.

Total exports during the first quarter of the year ending March 2022 also declined 12pc, from 153.29 million Kgs last year to 135.50 million Kgs.

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“The decline in export volume was majorly due to the effect of the Russia-Ukraine crisis that caused global economic recession and thus negatively affecting the commodity prices,” said TBK.

Russia which is Kenya’s 5th largest tea export market registered a 74pc drop in shipments reducing from 2.68 million Kgs in March last year to 686,072Kgs this year.

On the other hand, Kenya lost the Ukraine market where it exported 205,133Kgs in March 2021.

“Owing to these disruptions, shipments of tea to Russia were affected while logistics of tea exports to other European markets were held back due to increased congestion in respective ports of entry attributed to diversion of cargo destined for Russia. Consequently, tea buyers in Russia and the Commonwealth of Independent States were not very active in auction trade,” said the Board.

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TBK says during the month, Kenya shipped its produce to 47 markets compared to 50 last year with Pakistan being the leading export destination with 16.21 million Kgs accounting for 36pc of total export volume.

Other leading export markets were Egypt, the UK and Sudan with 10.26 million Kgs, 3.26 million Kgs and 2.91 million Kgs respectively.

The war in Eastern Europe has also affected auction prices as the average monthly auction prices fell to US$2.59 (Ksh 297.85) per Kg in March, from US$2.73 (Ksh 308.20) in February but higher than US$2 auction prices recorded in March last year.

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The government had set a minimum reserve price of US$2.43 per Kg in July last year in order to cushion smallholder farmers who were battling high cost of production.

TBK says during the period under review, tea offered for sale by the smallholder factories were sold at an average price of US$2.65 per Kg of main grades which was higher than US$2.17 last year.

The volume of tea sold at the auction also rose significantly when compared to February with 45.29 million Kgs of tea sold compared to 36.40 million Kgs, though year-on-year sales stagnated

Tea production in March also declined from 48.69 million Kgs in March last year to 46.32 million Kgs this year.

In March 2022, Kenya’s tea production also fell by 2.37 million Kgs, from 48.69 million Kgs recorded last year to 46.32 million Kgs owing to depressed rainfall and dry season in tea some tea growing regions.

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