Tea prices are expected to remain stable this year despite a decrease in production due to drought, Agriculture and Food Authority director-general Alfred Busolo said yesterday.
“We are looking at the upwards of 450 million kilogrammes which could be as a result of effects of the prolonged drought. This will be lower compared to the 2016 output of 473 million kilogrammes,” said Busolo.
Speaking during the official opening of the third Tea Convention and Exhibition in Nairobi, Busolo added that this will, however, not change the 21 per cent global tea market share that Kenya controls.
According to the 2017 Economic Survey, the value of tea production declined by 1.6 per cent from Sh118.4 billion in 2015 to Sh116.5 billion in 2016 due to lower market prices.
Kenya Tea Development Authority chief executive Lerionka Tiampati (pictured) said that the green leaf delivered by farmers dropped by 25 per cent of 705.2 million kilogrammes in the nine months to March compared to 936.6 million kilos in a similar period last year.
Factories managed by KTDA are currently operating below average following a sharp drop in the green leaf delivered by farmers. Some of the hardest hit areas are Kirinyaga, Nyeri and Embu counties.
The drop in production and lower prices at the Mombasa Tea Auction mean that KTDA is unlikely to match the Sh84 billion generated last year, translating to lower earnings for the 560,000 smallholder farmers.
Tiampati said that February was the worst month when green leaf delivered by farmers dropped to 54.3 million kilogrammes compared to 114 million kilos in February 2016. March saw a drop of 35.8 per cent to 77.9 million kilos, he added.
Prices at the Mombasa Tea Auction have also been lower at an average US$2.5 (about Sh258.26) per kilo in the nine months to March, compared to the US$2.74 (about Sh283.07) average for a similar period last year.
Busolo said new strategies should be adopted to enhance crop productivity as increase in tea acreage is threatened by surging population and real estate investment.
“Our tea farming is rain-fed and declines during the dry season. Some of the options that needs to be fast-tracked include irrigation during the dry season,” he said, adding: “There is also need to relook at the entire value chain in terms of reviewing existing policies and advocating for contract farming between produces, buyers and packers.”