The average price for Kenya’s tea exports rose for the third month to hit Ksh335,407 ($2,351) per tonne in May, the highest in nearly eight years driven by a weak shilling and increased demand for the beverage.
Data from the Central Bank of Kenya (CBK) shows tea export earnings grew by 33 per cent to Ksh16.17 billion ($113.34 million) in May – the highest since March – up from Ksh12.17 billion ($85.31 million) in April.
Improved earnings were supported by an increase in prices of the beverage, which was the highest since August 2015 when they were Ksh342,428 ($2,400) per tonne as well as a jump in volumes, which rose to 48,229 tonnes up from 37,025 tonnes.
The Kenyan shilling has been on a downward spiral against the greenback with the local currency trading at a record low of Ksh142.52 against US currency yesterday. The slump has been a boon for exporters who are now earning more in the local unit for their produce.
Tea growers produced 57.88 million kilogrammes of the beverage in May, an increase of 7.63 million kilogrammes from 50.25 million kilogrammes in the same period last year, according to the Kenya Tea Board (KTB).
Output was also higher compared to 49.49 million kilogrammes recorded in April with the agency attributing the rise to better weather conditions.
“Though the month of May marks the cessation of the long rains over most parts of the country, rainfall recorded across the country was moderate and well distributed,” said KTB.
Tea production in the west of Rift Valley was higher by 5.22 million kilogrammes from 32.81 million kilogrammes recorded in May 2022 to 38.03 million kilogrammes this year.
“In tea-growing areas in the west of Rift, Kericho received near-normal rainfall of about 82 per cent of its long-term mean precipitation for the month while the rest of the region (Bomet, Kisii/Nyamira, and Nandi) recorded moderate rainfall,” said KTB.
Similarly, production within tea-growing areas east of the Rift Valley was enhanced by 2.42 million kilogrammes from 17.43 million kilogrammes to 19.85 million kilogrammes.
“In the east of Rift, high rainfall ranging an average of 98-178mm daily was recorded in the first week of May and moderate rainfall during the rest of the month,” said the agency.
Kenya’s tea export volumes, however, continue to be hampered by a shortage of foreign exchange reserves and conflicts which have affected exports to key export markets such as Pakistan, Egypt, Yemen, Sudan, and the United Arab Emirates.
In April, Kenya shipped tea to some 43 countries, compared to 45 nations in a similar month last year.
“Despite foreign reserves challenges, Pakistan maintained its position as the leading export destination for Kenya tea having imported 8.03 million kilogrammes, which accounted for 33 per cent of the total export volume,” said KTB.
The Kenya Kwanza administration has promised reforms in the tea sector to boost earnings for farmers which led to the ouster of David Muni Ichoho as the chairman of the Kenya Tea Development Agency (KTDA) last month.
He was replaced by Enos Njiru Njeru who promised to explore new markets for Kenya’s tea.