By Leo Odera Omolo.

AFTER suffering its deepest drop in production ever, Kenya¢s tea industry has recovered marginally to the onset of the long rains.

The industry was hit the hardest following post election violence that sent hundreds of thousands of its manual workers away from their places of work.

In areas of North and South Rift Valley Province where most of the large scale tea plantations are located some of the factories are still running at halt their daily production capacity due to acute shortage of labour.

On the national trading, the Tea Board of Kenya has reported that the April harvest was only 27.4 million kg compared with the 16.9 million kg registered in March and 24 million kg recorded in February.

Despite the improvement, output for the month under review was still 10% lower compared with the 30.6 million kg registered during the same month last year, due to depressed and poorly distributed rainfall in most parts of the country, the TPK says in a new report just released.

As a result of depressed rainfall in April and prolonged dry weather conditions experienced during the January- March season, cumulative production for the period dropped by 30 per cent from 139.3 million kg registered during the same period last year to only 98.1 million kg, the lowest recorded in the history of the tea industry sub-sector of the economy in Kenya.

During the month, some 25.5 million kg was offered for sale at the Mombasa Auctions at a 45 per cent increase compared with 17.6 million kg offered in March and 9 percent higher than the 23.3 million kg offered in April 2007.

Also reportedly improved was the average unit price for tea, which stood at price for tea, which stood at USD. 2.23 recorded in March this year and USD 1.65 recorded last year.

As a result of increased auction supplies, the volume of tea exported in April increased by 48 % to 33.2 million kg from 23.8 million kg recorded in march and 18 % compared with 29.8 million kg recorded in April last year. Buyers were reported to be purchasing more as reports emerged that Kenya was producing less tea.

During the period under review, Kenya-made tea was exported to 35 market destinations world-wide compared with 31 destinations during the same period last year.

Egypt was the leading export destination, having imported 13.6 million kg, which accounted for the 39 percent of the total export volume. Other key markets include the UK, which imported 4.5 million kg, Sudan 3.3 million kg, Pakistan 3.5 million kg and Afghanistan (2 million kg).

The markets accounted for 77 per cent of total export volume and the rest accounted for 23 per cent.

Among the five traditional markets for Kenyan tea, Egypt registered the highest growth of 65 % compared with the same period last year. Sudan and UK registered a growth of 63 percent and 43 per cent respectively.

Among the non-traditional markets, Nigeria recorded the highest growth of 615 per cent. Other non-traditional markets that recorded significant growth were the Netherlands (324 %); Poland (214 %); Turkey (212 %) and Oman (179 %).

Major markets that registered decline in tea export volumes compared with the same, period last year were Puerto Rico (85 %); Saudi Arabia (68 %); Afghanistan (46 % ); US ( 48 % ); Ireland ( 46 % ); Pakistan ( 41 % ); and Russia ( 32 $% ).

The drop I export to these destinations was occasioned by reduced demand, particularly within the lower-end market segment, due to increased prices. However, this drop is seasonal and demand is expected to rise soon following increased supplies occasioned by the recovery of the industry from the effects of drought, said TBK managing director Cicily Kariuki.

Local consumption rose to 1.5 million kg an increase of 34 % compared with 1.1 million kg recorded in March and 6 % compared 1.4 million kg recorded in April 2007. Local consumption for the period of January- April 2008 stood at 5 million kg, 4 % lower compared to 5.1 million kg recorded during the same period in 2007.

The drop in local tea consumption was attributed to shift in preference towards cold beverages during the first three months of the year owing hot weather conditions. To address the issue of depressed local tea consumption in the long-term, the industry is now repositioning tea as both an indoor and outdoor drink which can be taken any time, hot or cold besides having refreshing, natural and healthy attributes a more being led by Kenya tea packers with their recent introduction of bottle Ready-to-Drink tea in the local market.

End.

leooderaomolo@yahoo.com

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Date: Mon, 7 Jul 2008 04:09:36 -0700 (PDT)
From: Leo Odera Omolo
Subject: KENYA: DEPRESSED TEA INDUSTRY IS MAKING MARGINAL RECOVERY AFTER PLITICAL UPHEAVALS.