Price rises compensate for a fall in the volume of East African tea exports
09 September 2012
The Kenya Tea Board has announced a fall of 11.4% in tea production for the first half of 2012, a total of 158,170 tonnes against the 178,400 tonnes achieved over the same period in 2011. The Tea Board gives a full-year estimate of 360,000 tonnes, against the 2011 figure of 377,000 tonnes – a fall due mainly to the drought which raged at the beginning of the year, followed by a period of cold which hit the production zones.
Uganda experienced the same difficuties, with drought conditions obtaining in some regions from January to March 2012, and is expecting an 8% fall in production this year. George Sekitoleko, Secretary-General of the Uganda Tea Association, indicates that production in 2012 should reach 52,000 tonnes, compared to 56,000 tonnes in 2011.
Exports through the port of Mombasa, which handles tea from all East African countries, are expected to reach 207,770 tonnes for the first half of 2012, compared with 211,700 tonnes for the same period in 2011. However, this will have little financial impact because the average price of tea has increased from US$2.97 for the first 6 months of 2011, to some US$3 per kilo.
The region has also managed to broaden its export markets this year – with Brazil, Togo and Cameroon now buying more tea from Kenya and the sub-region – while traditional buyers like the United Arab Emirates, Kazakhstan, Djibouti and Indonesia have also increased their purchases. However, Egypt remains the largest customer, representing 21% of exports through Mombasa in the first semester of 2012, according to the Kenya Tea Board.
A market worth highlighting is the United Arab Emirates, where tea consumption has grown by 47% and Dubai remains a major hub, re-exporting 18,000 tonnes of tea in the years 2011–2012 alone. Local consumer habits are changing: blends are currently popular and the health benefits of tea form the subject of a big marketing campaign.
Editorial comment
The conditions recently experienced by the East African tea industry could well recur, with meteorological and climatic factors potentially becoming the source of ever more frequent and intense disruption. The three countries of East Africa have managed to extricate themselves on this occasion, but only because other important producers such as India (with an 11.5% decline in production between January and May) also experienced similarly unfavourable weather conditions. The whole of the world tea offer has suffered, hence the rise in price.
But global competition is intensifying, and the situation may not always be so kind to East Africa. To meet these new challenges, perhaps with EU support, tea currently sold in its raw state could be processed in situ to secure greater added value. Research might also be conducted into types of tea better able to resist the vagaries of climate. Insurance mechanisms could equally be put in place to ensure producers have sufficient stocks of fertiliser at their disposal to maintain levels of production, unlike the current situation in Uganda.
