June 30, 2010 / 11:32 AM / 9 years ago

Kenya's tea sector eyes new markets, branding

NAIROBI (Reuters) - Kenya’s tea sector will seek new international markets for their product because of the threat posed to growers and the economy by over-concentration with traditional buyers, an industry official said on Wednesday.

Workers pick tea at a plantation outside Kericho February 6, 2008. REUTERS/Peter Andrews

Tea is the second biggest source of foreign exchange in Kenya after horticulture and ahead of tourism.

“Over-concentration in five traditional markets continues to pose a risk with over 75 percent of all tea exports being sold to Egypt, Pakistan, UK, Sudan and Afghanistan,” said Titus Kipyab, chairman of regulator Tea Board of Kenya.

“Emerging markets such as China, CIS (Commonwealth of Independent States) and Middle East, North America and Africa have been identified as having great potential,” Kipyab said.

Kipyab was speaking in the Kenyan capital, Nairobi, at the launch of a branding campaign. A ‘Mark of Origin’ will brand its tea and increase its visibility internationally.

“The ‘Mark of Origin’ is intended to address some key market concerns, specifically enhanced visibility and assurance of the quality of Kenya tea to consumers,” Kipyab said.

He said the industry was facing a series of constraints.

“At the production level, the ever rising costs of production, driven by increasing fuel, energy and wage bills continue to be of concern,” he said.

Romano Kiome, the Agriculture Ministry’s permanent secretary, told the launch that Kenya’s economy was at risk if it continued to rely on so few markets for its tea exports.

“It presents risks as any bilateral disagreement or socio-economic instability in these markets will have a direct impact on the exports,” said Kiome, who added that key emerging markets, such as those in Africa, must now be targeted.

The government said last week that tea production was expected to rise by between 5 and 10 percent above 2009 levels of 315 million kg, rather than the 15 percent previously anticipated, due to cold weather.

The cold season that normally runs from June to August inhibits development of tea leaves, cutting output.

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