KENYA – Kenya’s tea industry has defied global shocks, with earnings for the first 11 months of 2023 surpassing the total income for the entire year of 2022, reaching US$1.05 billion. 

Data released by the Kenya National Bureau of Statistics (KNBS) on Tuesday revealed that this impressive growth was driven by increased export volumes and a significant boost from a weaker local currency. 

In 2022, Kenya earned US$860 million from the sale of 410 million kg of tea, but in the period between January and November 2023, earnings rose to US$1.05 billion from a volume of 511 million kg.  

This achievement is remarkable given the global challenges, including the Ukraine-Russia conflict, high inflation in developed economies, and constrained sales in key markets like Sudan and Russia. 

The KNBS reported that a 27 percent year-on-year depreciation of the local currency against the dollar, averaging 160, played a pivotal role in boosting tea earnings. The bulk of exports, approximately 50 million kg each, were recorded in March, May, August, and November.  

Kenya’s favorable tea output conditions in 2023 were attributed to El Nino rains, as stated by the Tea Board of Kenya. The country is projected to harvest over 500 million kg in 2023, up from 450 million kg in 2022. 

Deputy President Rigathi Gachagua emphasized the positive impact of sector reforms, anticipating tea earnings to exceed US$1.01 billion in 2023, contributing to an increase in foreign exchange reserves.  

Tea remains a significant contributor to Kenya’s foreign exchange, constituting about 2 percent of the gross domestic product, alongside horticulture, tourism, and diaspora remittances, according to the Ministry of Agriculture. 

The news come after Limuru tea issued a profit warning, anticipating a more than 25 percent drop in profit attributed to increased operational costs. 

The company joined 13 other companies that have issued profit warnings to investors since last year, citing higher costs and a valuation decline on assets. 

The company attributed the losses to the high cost of importing fertilizers, the depreciation of the Kenyan shilling, and a projected loss in biological asset valuation last year. 

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