Tea out­put drops 12pc in Q3 on bad weather

Ny­eri, Kirinyaga were worst af­fected with up to 36pc pro­duc­tion fall

Business Daily (Kenya) - - MONEY & MARKETS - Ger­ald An­dae gan­dae@ke.na­tion­media.com A tea pick­erat Kan­gaita in Gichugu, Kirinyaga County.

Tea pro­duc­tion in the nine months to Septem­ber dropped 12 per cent on ac­count of se­vere drought wit­nessed par­tic­u­larly in the first quar­ter of the year.

Monthly data from Tea Direc­torate in­di­cate the vol­umes dropped to 303 mil­lion kilo­grammes (kg) be­tween Jan­uary and Septem­ber from 346 mil­lion in the cor­re­spond­ing pe­riod last year.

“The de­cline is at­trib­uted to un­fa­vor­able weather con­di­tions that was ex­pe­ri­enced dur­ing the first quar­ter of the year,” says the re­port.

The pro­duc­tion de­cline af­fected ex­port vol­umes with quan­ti­ties sold through the Mom­basa auction shrink­ing by 17 per cent, to 320 mil­lion kgs in the pe­riod un­der re­view, from 387 mil­lion kgs be­tween Jan­uary and Septem­ber 2016.

Re­duced sup­plies at the auction helped to boost price of tea in the in­ter­na­tional mar­kets, where Kenya sells over 90 per cent of its bev­er­age, mak­ing it the lead­ing ex­porter of the com­mod­ity.

Cu­mu­la­tive av­er­age price for the nine months of 2017 was on av­er­age higher at Sh306 per Kg com­pared with Sh236 for the cor­re­spond­ing pe­riod of 2016.

“Im­proved prices were at­trib­ut­able to good de­mand against lower sup­ply of tea in the first quar­ter of the year when the coun­try wit­nessed a de­cline in pro­duc­tion,” says the re­port.

The yields for 2017 are ex­pected to drop by dou­ble dig­its, ac­cord­ing to Agri­cul­ture Food Au­thor­ity (AFA) due to the ef­fects of drought in what is likely to af­fect farm­ers’ earn­ings in the 2017/2018 fi­nan­cial year.

The AFA says pro­duc­tion of green leaf will drop from 473 mil­lion kgs in 2016 to about 420 mil­lion kgs.

Ny­eri and Kirinyaga coun­ties were the worst hit this year, with pro­duc­tion fall­ing by 30.6 per cent and 32.6 per cent re­spec­tively.

The drought, ac­cord­ing to Kenya Tea De­vel­op­ment Agency (KTDA), which man­ages small scale farm­ers, cut grower’s sec­ond earn­ings from Sh44 bil­lion paid last year to Sh42 bil­lion this year.

Kenya is a lead­ing ex­porter of black CTC tea and the bev­er­age earned coun­try $1.226 bil­lion (Sh127.3 bil­lion) last year, which was a drop of 1.7 per cent from the $1.247 bil­lion (Sh129.4 bil­lion) the com­mod­ity recorded in 2015.


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