Tea Production is this year expected to fall by 12.05 per cent to 416,000 metric tonnes from last year's 473,000 tonnes due to the biting drought, Agriculture and Food Authority has projected.
The reduced output of the country's top foreign exchange earner is likely to hit hard smallholder farmers even as price at the weekly Mombasa auction touched a two-year high of Sh286 per kilo last year.
Increased earnings last year saw the farmers earn a bonus of between Sh48 to Sh40 per kilogramme – about 50 per cent jump year-on-year.
AFA interim management committee chairman Raphael Lekolol said tea volumes are expected to drop significantly this quarter ending March compared to the same period in 2016.
Lekolol said this is because of depressed rainfall conditions experienced during the October-December period, and the effects of the current drought situation.
“The total production for 2017 is expected to drop to about 416 million kilos or 12 per cent decrease from 2016. Similarly, export volumes are expected to drop by the same margin of 12 per cent to reach 422 million kilos, while earnings are expected to hit a record of Sh133 billion,” he said.
Speaking yesterday in Nairobi while releasing the tea performance report, Lekolo said tea production in 2016 reached an all-time high of 473 million kilos.
“This is attributed to the good weather conditions experienced in tea growing areas during the first half of 2016. Production for 2016 was 18.4 per cent higher compared to 399 million kilos recorded in 2015. It was also remarkably higher compared to other record outputs of 445 million kilos in 2014 and 432 million kilos in 2013,” the chairman said.
“With regard to auction prices, a 22 per cent increase is expected from an average of Sh236 (US$2.36) per kilo recorded in 2016 to Sh290 (US$2.90).”
According to the tea performance outlook, the production in 2016 per hectare was the same as in 2014 and 2013 at 2,300 kilos. In 2016, the smallholder sub-sector output was 265.6 million kilos, while the estate sub-sector produced 207.4 million kilos.
He said because of increased supply, the Kenya Tea Auction prices declined significantly from an average of Sh298 (USD 2.98) per kilo recorded in 2015 to Sh236 (US$2.36).
“Tea from other producers in the region also experienced a significant reduction in auction prices, with most of them recording below an average of Sh200 (US$2) per kg. Globally, continued pressure of the US dollar against the respective local currencies also affected the consumer purchasing power in most markets,” Lekolol said.
Some 480.3 million kilos of tea were exported in 2016, 36.8 million kilos higher than 443.4 million kilos exported in 2015.
Due to lower prices, the export earnings dropped by Sh4.5 billion from Sh125.2 billion recorded in 2015 to Sh120.6 billion.
“This is despite favourable exchange rate to the US$ which stood at an average of Sh101.24 against Sh98.59 during the previous year. During 2016, 29.7 million kilos were consumed locally against 19.3 million consumed in 2015,” Lekolol said.