Prices for Kenyan tea have reached their highest levels in nearly eight years, driven by a combination of increased demand for the beverage and a weaker national currency. This surge in tea prices has resulted in significant export earnings for the country’s tea industry, providing a much-needed boost to the Kenyan economy.
According to data from the Central Bank of Kenya, the average price for Kenya’s tea exports rose for the third consecutive month, hitting Ksh335,407 (approximately US$2,351) per tonne in May. This marks a notable increase in comparison to previous months and highlights the growing demand for Kenyan tea in the global market.
The tea industry in Kenya experienced a substantial uptick in production during May, with tea output rising by 7.63 million kilogrammes to reach 57.88 million kilogrammes. This increase in production played a crucial role in meeting the rising demand for Kenyan tea in both local and international markets.
One of the contributing factors to the rise in tea prices was the favorable weather conditions during the month of May. The Kenya Tea Board (KTB) reported that although the long rains had ceased in most parts of the country, moderate and well-distributed rainfall still occurred in tea-growing regions. Areas such as Rift Valley and Kericho received near-normal rainfall, positively impacting tea production.
The western part of Rift Valley, particularly Kericho, saw a significant increase in tea production, with output rising by 5.22 million kilogrammes compared to the previous year. Similarly, tea-growing areas east of the Rift Valley experienced enhanced production due to high levels of daily rainfall, resulting in a rise of 2.42 million kilogrammes compared to the previous year.
Tea exports in April saw a decline in the number of destination countries, with Kenya shipping tea to 43 countries compared to 45 in the same month of the previous year. Challenges such as foreign exchange shortages and conflicts have impacted tea exports to key markets. However, Pakistan remains the leading export destination for Kenyan tea, accounting for 33 percent of the total export volume.
The increasing demand for orthodox tea has also contributed to the higher tea prices. Kenyan tea factories are witnessing a surge in buyers seeking orthodox tea, prompting many of them to consider adding another processing line to meet this demand.
Recognizing the significance of the tea industry to the country’s economy, the Kenyan government has prioritized tea reforms. These reforms aim to revitalize the tea export sector and ensure better profitability for tea farmers. Efforts are underway to address issues related to price discovery, revenue distribution, and governance practices, with the goal of creating a more equitable and sustainable tea value chain.
In conclusion, the Kenyan tea industry is experiencing a notable upswing in prices, reaching levels not seen in eight years. This is primarily due to increased demand for the beverage, favorable weather conditions that boosted tea production, and a focus on reforming the tea sector to enhance profitability for farmers. As the global appetite for Kenyan tea continues to grow, it presents an excellent opportunity for the country to strengthen its position as a major player in the international tea market and drive economic growth.
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