Farmers and factories producing high-quality tea are set to enjoy better prices as the auction followed quality with “Good” to “Medium” categories attracting more competitive bids and considerably higher prices
Tea Board of Kenya (TBK) Chief Executive Officer (CEO) Willy Mutai said that during October 2024, tea offered for sale by the smallholder tea factories managed by KTDA, whose quality is relatively higher fetched an average price of 2.83 USD (approximately Sh366) per Kg for the main grades compared to 2.78 USD (approximately Sh360) recorded during the same period in 2023.
Mutai explained that “Lower Medium” and “Plainer” teas and secondary grades attracted either less interest and thus discounted prices or no offers and consequently constituted the highest proportion of teas on offer at the auction that was withdrawn.
“Depending on the quality band, the leaf grades generally attracted relatively higher prices than the dust and secondary grades, respectively,” said Mutai.
He disclosed that auction sales volume for Kenya tea during October stood at 32.58 million Kgs, which was lower compared to 38.63 million kg recorded during the corresponding month of 2023.
Mutai said that though there was generally good demand for tea offered at the auction, the prices continued to be impacted negatively by relatively higher supply.
He said that the demand for tea at the auction continued to be affected by the effects of global economic shock experienced in most countries due to the Russia-Ukraine crisis and market access challenges owing to internal conflict in Sudan as well as shipment disruptions through the Red Sea.
“This has continued to affect the sale of certain grades of tea at the auction leading to lower absorption. However, compared to the previous months, absorption for teas offered under the main catalogue was fairly good at 69%. During the month, Pakistan packers were active but selective in their buying while the Egyptian and South Sudan packers had good interest,” said Mutai.
According to the CEO, during the month of October, the volume of specialty teas produced was 710,560 Kgs, which represented 2% of the total production. Specilality teas were dominated by Orthodox teas at 92% (651,527.90 Kgs) and was largely produced by Estates and Independents tea factories, respectively. The rest of Specilality teas consisted of Green and Purple tea produced by the Cottage tea industries.
He added that tea production for October 2024 dropped by 2.73 million Kgs from 52.79 million Kgs recorded during the same period of last year to 50.06 million Kgs.
Mutai said that lower production was attributed to generally low and poorly distributed rainfall experienced within the country explaining that though the month of October marks the onset of the “Short-rains” season, the amount of rainfall recorded in most parts of the tea growing areas was depressed (near-to-below average precipitation for the month of October).
“During the month of October 2024, most of the tea growing areas within the West of Rift experienced low to moderate rainfall of between 9mm to 38 mm daily with the exception of Kericho and Nandi, respectively, which recorded higher precipitation ranging from 20 to 73 mm daily. However, precipitation within the tea growing areas in the East of Rift was relatively lower compared to the West of Rift at between 1 mm to 35 mm daily,” he said.
The CEO highlighted that cumulatively up to the month of October, production for the year 2024 was higher by 6.5% (30.21 million Kgs) from 465.01 million Kgs recorded during the first ten months of 2023 to 495.23 million Kgs.
He said that higher production was due to favourable weather recorded during the first four months of the year, with rainfall ranging from near-to- above the long-term average amounts compared to the trend for the same period over the years owing to El-Nino weather phenomenon.
The total export volume for the month of October 2024 was lower by 9.04% (4.33 million Kgs) from 47.96 million Kgs recorded in the same period last year to 43.63 million Kgs.
Mutai said that this was despite shipments to more export destinations at 61 compared to fifty-six 56 for the same period of last year.
“Lower export volume was attributed to less exports to the traditional and emerging markets, with Pakistan recording less imports by 4.71 million Kgs while exports to Egypt were lower by 2.63 million Kgs,” he said.
Mutai said that despite lower volume, Pakistan maintained its position as the leading export destination for Kenya tea having imported 13.10 million Kgs, which accounted for 30% of the total export volume. Egypt was the second largest export destination having imported 6.22 million Kgs and was followed by UK (3.80 million Kgs); UAE (2.87 million Kgs); Russia (2.77 million Kgs); India (2.37 million Kgs); Sudan (1.60 million Kgs); Poland (1.23 million Kgs); China (1.09 million Kgs); and Saudi Arabia (0.69 million Kgs).
