Tea production in Kenya is likely to increase only marginally this year, owing to hailstorms, delayed short rains, and high temperatures. The Kenyan tea industry is also facing an increase in the cost of production to $1.5 per kg, making it difficult to sell at $1.5-1.7 per kg.
Sicily K Kariuki, managing director of the Tea Board of Kenya, said, ?Weather was very favourable after the first quarter, but in the third quarter tea production in our country suffered from hailstorm, delayed short rains. Thus, it is difficult to predict production.?
Last year, Kenyan growers realised an average price of $2 per kg because of huge demand. ?Because of the prolonged drought situation last year, there was huge demand in the market. It sucked up whatever there was, and prices went up,? she said.
The weather this year has affected the supply situation, while world prices have also fallen. Unlike winter dormancy in India, tea is produced throughout the year in Kenya, as the weather remains almost the same.
Kenya exported around 294mkg of tea or 95% of its production last year, mainly to countries like Pakistan, the UK, and Egypt through the Mombassa auction.
Meanwhile, the cost of production has gone up to $1.5 a kg, leaving little margin for the sellers. While Pakistan imports 80% of its tea from Kenya, the fall in production and increased price in 2005 made Pakistani importers turn to India.
