Tea sector posts record earnings in 2011

January 25, 2012
Tea sector posts record earnings in 2011/FILE


NAIROBI, Kenya, Jan 25 – Earnings by the Kenya Tea Industry soared to Sh109 billion last year from Sh.97 billion in 2010, due to high prices and a weaker local currency against the dollar.

Assistant Minister for Agriculture Gideon Ndambuki said Kenya had also secured new markets in China, Iran, United Arab Emirates, Russia, and North America as well as licensing of new factories in the tea growing areas.

He however said Kenya – the world’s largest exporter of black tea – produced less tea last year due to adverse weather.

The unfavourable weather conditions experienced in 2011, caused tea production to fall by five percent to 377.9 million kilograms compared to 399 million kilograms produced in 2010.

Even with this reduction, the production for last year was still higher than the outputs recorded in 2007 to 2009.

Ndambuki said that compared to other crops, the tea sector continued to perform better, but he urged the Tea Board of Kenya to continue pushing its influence to new markets.

“I want to direct the Tea Board to be innovative and proactive in marketing and promoting tea so that we can open new destinations.”

Among the emerging five markets, exports to Russia alone grew by 44 percent from 12.1 million kilograms recorded in 2007 to 17.4 million kilograms in 2011.

Over the same period, exports to UAE grew by 64 percent from 13.7 million kilograms to 22.6 million kilograms while exports to China grew by 68 percent from 1.2 million kilograms to 2.1 million kilograms.

In Iran, the tea exports from Kenya increased by nearly five times over the four-year stretch, from 1.1 million kilograms to 5.4 million kilograms.

These new markets are in addition to the traditional five countries that the Kenya Tea industry has relied on over the years such as Egypt, Pakistan, United Kingdom (UK), Afghanistan and Sudan.

These five markets still take up over 70 percent of total tea exports, with Pakistan accounting for 19 percent, or 80.8 million kilograms of the total export volume.

Following in total number of tea imports was Egypt with 79.9 million kilograms, the UK with 68.3 million kilograms, Afghanistan with 44.4 million kilograms and Sudan with 26.1 million kilograms.

Ndambuki said that local consumption of tea was only about five percent and challenged the Tea Board and Tea Research Foundation to embark in value chain analysis in order to identify critical points for intervention to increase yield.

Earnings from local consumption were Sh11 billion and Ndambuki says that more Kenyans will purchase tea in 2012 thanks to a sustained promotion campaign by the Tea Board of Kenya, an intensive brand promotion by the tea packers, as well as intense sales by factories through factory door sales.

The current hot and dry weather conditions will cause production in the first quarter to drop by 17 percent to about 70 million kilos, but due to expected firm prices, the tea export earnings are projected to reach Sh115 billion this year.

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