Ratio Magazine :: The Inside Track to East Africa’s Economies - Kenya: Press Releases: Local Tea Consumption Doubles, Marginal Drop in Production

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Kenya: Press Releases: Local Tea Consumption Doubles, Marginal Drop in Production

Thursday, 28 July 2011

Nairobi, 28 July 2011 --- Strategic efforts by the Tea Board of Kenya and related stakeholders to promote the consumption of Kenya teas appears to be paying off with Kenya’s cumulative tea consumption increasing significantly.

In its half year performance report, the Tea Board of Kenya noted that the cumulative local tea consumption grew by more than 16% in the period ending June 2011 and now stood at more than 10m kgs, up from 8.6m kgs consumed within the same period last year.

Speaking when she released the half year performance results, Tea Board of Kenya Managing Director, Mrs. Sicily Kariuki, attributed the growth in local tea consumption to sustained promotional campaigns by the board backed by intensive brand promotion activities by tea packers.

“Tea Board’s intensive promotion of a tea drinking culture for better health has seen a sustained growth in domestic consumption,” said Mrs. Kariuki. “Factory gate sales have also provided an awareness platform and encouraged repeat sales at the grass root level.”

However, even as local consumption continues to grow, tea production has suffered a marginal decline attributable to the recent hot and dry weather conditions experienced during the first quarter of the year.

Tea production was also affected by the depressed and poorly distributed rainfall patterns experienced in most tea growing areas during the second quarter. Consequently, tea production declined by 16.2% in the first half of the year to close at 178.4m kgs.

Although lower compared to last year’s output, the country shipped 211.7m kgs of the brew during the first half quarter of the calendar year 2011. Exports fell by almost 2.5% to 211.7m kg, down from 216.9m kg in the year-ago period.

In 2011, exports increased, helped by an additional six destinations, bringing overall shipping destinations to 48. Pakistan, one of Kenya’s traditional tea export markets, still leads the pack with 40.1m kg, followed by Egypt with 36.9m kg. Both together account for 71% of the total export volume.

Globally, several factors contributed to a drop in exports chief among them being the wave of political upheaval in the Muslim countries that affected Egypt, Kenya’s second largest tea export destination, well as the effect of smuggled of commodities into Afghanistan, resulting in a 10% reduction.

“In addition to traditional tea, deep processed products with high technology content have become new favorites of the market. Tea drinks and instant tea have met people's requirement for increasingly accelerating life pace. Green tea and iced tea products have not only become health care products, but have been adopted into various lifestyles” added Mrs. Kariuki

Compared to production at a similar time last year, tea output within the small holder sub-sector decreased from 124.3m kg to 105.8m kg, with the plantation output recording an 18% dip in production to 72.6m kg.

In Kenya, the tea industry is a highly competitive industry with the small holder sub sector accounting for 59% of the total production, with the enterprises producing and processing tea and branding it for the domestic market.

Despite many unfavorable factors such as a weakening shilling and increase in costs of production goods and labor, Kenya’s tea export volume still remained critical to the international market priced at USD2.98 /kg which held significantly against competition.

It is predicted that in 2011-2012, both output and the export volume of Kenyan tea will increase while market competition will intensify.

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