TEA PRODUCTION

High production suppresses tea prices

Compared to last year, the exchange rate dropped 1.6% as the Kenya Shilling strengthened against the dollar.

In Summary

• Average price of KTDA teas declined to $2.62 per kilogram (Sh262) compared to $3.25 (Sh325) the previous year.

• Compared to last year, the exchange rate dropped 1.6% as the Kenya Shilling strengthened against the dollar.

A worker picking tea at a farm in Nandi on April 29th
A worker picking tea at a farm in Nandi on April 29th

High tea production by small scale growers in the first nine months of 2018/2019 financial year suppressed prices, according to the Kenya Tea Development Agency.

The agency that manages small cal holders  said production went up to 868 million kilogrammes during the period compared to 824.8 million kilos over the sae period the previous year.

This saw prices of green leave delivered to KTDA run  factories drop by 19.5 percent. 

The average price of KTDA teas declined to $2.62 per kilogram (Sh262) compared to $3.25 (Sh325) the previous year.

“The increased production during the nine months period was largely attributed to the reliable rainfall experienced in tea growing areas late into 2018," KTDA Group CEO, Lerionka Tiampati said.

He said intensified sustainable agricultural practices such as fertiliser application helped boost production.

Tampati said that despite the drought experienced in the last several months, high production towards the end of last year continued to dampen the prices.

"The drought has recently led to reduced production and we anticipate this reduction could see prices improve as less tea volumes are offered for sale " he said.

Compared to last year, the exchange rate dropped 1.6% as the Kenya Shilling strengthened against the dollar.

Other tea producing countries such as India also reported higher tea production in 2018 adding to global tea stocks which pushed prices down.

“Despite the reduction in production due to drought, it is not anticipated that prices will improve significantly between now and the close of the financial year in June 2019. Tiampati added.

He said farmers should therefore expect to receive lower total earnings for their produce this year.