NAIROBI, Kenya, Oct 1 – Kenya’s tea industry witnessed an increase in supply between January and August 2013 mainly due to high production in the country compared to the same period last year.
Kenya Tea Board Chief Executive Officer Zakayo Magara says production in the period of January to August 2013 improved by 7.5 percent from 214.4 million kilograms in 2012 to 278 million Kilograms, due to good weather conditions.
Magara announced that export volumes increased by 21 percent in the same period from 278.1 million kilograms in 2012 to 336.7 million kilograms in 2013.
Magara however said increased production coupled by overstocking by buyers prior to the run-up to the March 2013 elections has continued to exert pressure on tea prices.
“Other fundamentals affecting tea prices include the current political instability in Egypt which is a key market for Kenyan tea,” he said.
The prices of tea per kilogram reduced by 15 percent from Sh270 in 2012 to Sh230 in same period 2013.
“However, in the period under review total payout to smallholder tea farmers increased by 13 percent at Sh51.3 billion from Sh45.3 billion in 2012 owing to higher volumes coupled with favourable exchange rate compared to last year,” Magara said.
He said that local consumption increased by 27 percent from 12.59 million kilograms in 2012 to 15.71 million kilograms same period under review.
“Higher consumption of Kenyan tea is attributable to enhanced promotion and we will continue to promote local consumption for increased growth,” he said.
Magara projects a 21 percent increase in production to 415 million kilograms at the end of the year from 369 million kilograms produced in 2012.
Exports volumes are expected to grow by 12 percent from 430 million kilograms in 2012 to 480 million kilograms by the end of 2013.
“Exports value is also expected to increase by nine percent from Sh112 billion in 2012 to Sh122 billion at the end of 2013,” he said.
Globally most black tea producing countries recorded higher production of between 0.12 percent to 7.45 percent.
Uganda increased its production by 0.12 percent from 30.9 million kilograms to 34.6 million kilograms from January to July 2013 while India’s production grew 3.02 percent.
Prices in all major tea auction centers of the world have been lower attributable to higher production.
Magara was speaking at the launch of the 2013 “Tea Week” during which various activities have been planned to celebrate achievements of the industry and give an update of the key initiatives being undertaken to enhance competitiveness of the Kenya Tea industry.