Excess Global Supplies to Hurt Kenya Tea Farmers Earnings in 2020

Excess Global Supplies to Hurt Kenya Tea Farmers Earnings in 2020

Tea Estate in Kenya PHOTO I Mercy Murugi (@mercymurugi)

Earnings for small-scale tea farmers is likely to drop once again in 2020 on declining exports attributed to excess global supplies.

Data from the Agriculture and Food Authority (AFA) indicates that tea export earnings dropped by 16.4 percent in 2019 contributing to KSh117 billion towards the country’s GDP.

During the year 2019, a total of 497 million kilograms were exported which was 22 million kilograms higher than 474 million kilograms exported in 2018.

The report also indicates that the average price of Kenya tea fell to KSh223 per kilogram during the review period from KSh260 per kilogram in 2018.

In 2019, earnings for small-scale tea farmers dropped by 18.6 percent in the financial year ended June.

During the period, Pakistan remained the leading export destination for Kenyan tea having imported 177.7 million kilograms, accounting for 36 percent of the total export volume.

Other key export destinations for Kenyan tea were Egypt with 99 million kilograms, the UK at 46 million kilograms, the United Arab Emirates buying 25 million kilograms, among others.

Farmers affiliated to the Kenya Tea Development Agency (KTDA) earned KSh69.7 billion in the review period, down from KSh85.7 billion in 2018.

Standard Bank (Stanbic) Group Kenya in their 2020 Macroeconomic update, However, the recent rains are likely to boost tea production over the coming year and with source markets such as Pakistan and Egypt economically improving on the back of reforms being administered by their IMF programs, the tea sector could rebound in 2020 despite prices likely to remain subdued.

Stanbic Bank estimates that the economy was last year hurt by delayed long rains that dragged agricultural productivity.

Kenya is the leading exporter of black tea in the world.