Tea industry in East Africa is looking at a fall in earnings as projections show reduced returns in 2014 due to low prices on the international market.

Industry regulatory authorities in Kenya, Rwanda, Uganda and Burundi said increased tea supplies due to favourable weather conditions resulted to a glut in the international market, and subsequently leading to a fall in prices.

Kenya Tea Board Managing Director Elizabeth Kimenyi said Kenya’s tea export earnings in 2014 are expected to drop due to stiff competition from exporters such as India and China.

Since last year, rivalry intensified between Kenya, India and China over control of key tea markets including Pakistan, the UK, Afghanistan and the United Arab Emirates.

“As of November 2014, we had exported over 400 million kilogrammes of tea, which we hope will rise to around 430 million kilogrammes when the December figure is added in. However, average prices went down to $2 per kilogramme from $2.17 per kilogramme in the same period in 2013,  due to high export volumes,” Ms Kimenyi said.

Kenya’s tea earnings rose two per cent to Ksh114.4 billion ($1.04 billion) in 2013, helped by favourable weather and sales to new markets including Vietnam, South Sudan, Myanmar, South Korea and the Czech Republic, which cushioned its sector from a drop in world prices.

The country’s tea export volumes also jumped 17 per cent to record 432 million kilogrammes during the year.

Ms Kimenyi said the country is also seeking newer markets and to increase on the local tea consumption through promotions to increase on the sector’s profitability.

Kenya local tea consumption stands at merely five per cent of the total production due to competitions from other beverages including juice and water, she said.

Rwanda exported 24 million kilogrammes of tea forecast that last year fetching over $51 million well below the target of $83 million. Rwanda exported 21 million kilogrammes of tea in the previous year, earning the country $56.56 million.

The relatively poor performance last year was attributed to poor prices on the international market which were less than $2.5 per kilogramme compared with $2.77 in the previous year.

“This is our biggest challenge, since we don’t have any control over the prices still this year, we can hope for the best as we increase our production,” said Corneille Ntakirutimana, head of tea division at the National Agriculture and Exports Board.

Rwanda is aiming targeting to increase production capacity to 31 million kilogrammes this year,  with a revenue target of $73 million.

“This year three new factories will be completed enhancing value addition and quality of exports,” Mr Ntakirutimana said.

Tea is one of the country’s biggest foreign-exchange earners along with tourism, coffee and minerals.

Uganda and Burundi, too, expect a decline in tea earnings, citing low prices on the international market.

Uganda’s tea export volumes are projected to surge five per cent to 62 million kilogrammes in 2014.

George Ssekitoleko, the executive secretary of the Uganda Tea Association said the country’s tea earnings projections for 2014 remain unclear due to lower prices amid increased export volumes.

Uganda’s tea export earnings grew from $101 million in 2012 to $107 million in 2013 on the back of improved export volumes.

Burundi’s tea export earnings are also projected to drop following a six per cent  decline in the first nine months of the year to September 2014  from the same period a year ago due to over supply on the global market.

Data from the state-run tea board (OTB) showed that earnings dropped to $16.7 million in the period, while export volumes rose 5.2 per cent to 7,743,972 kilogrammes.

The average export price per kg for Burundi’s tea declined to $2.16 in the nine months to September 2014 from $2.42 in the same period in the previous year.

“Overall earnings as well as the export price for Burundi’s tea dipped due to high quantities of tea available on the regional market,” Joseph Marc Ndahigeze said.

In 2013, revenue from the commodity dropped to $20.8 million from $26.3 million in 2012, due to weaker global prices.

The EastAfrican was unable to obtain information about Tanzania’s projected tea performance.

The East African countries export their tea to Europe, Pakistan, Egypt, Sudan, and Ireland through a weekly auction in Mombasa.