September 17, 2014 / 11:39 AM / 4 years ago

Revenue from Kenya's small-scale tea farmers tumbles on global glut

NAIROBI, Sept 17 (Reuters) - Tea revenue from Kenya’s small-scale tea farmers fell 24 percent to 52.9 billion shillings ($594.38 million) in the 2013/14 financial year due to a global glut, their national co-operative said on Wednesday.

Tea is a leading foreign exchange earner in East Africa’s largest economy and members of Kenya Tea Development Agency (KTDA) account for about 60 percent of tea output in Kenya, the world’s top exporter of black tea.

The rest of Kenya’s tea is produced by large-scale farmers and corporations.

Lerionka Tiampati, managing director of KTDA, said in the financial year that ended in June, tea prices at the weekly auction conducted in Kenya’s port of Mombasa averaged $2.43 per kg compared with $3.26 in 2013.

“We expect challenging times ahead because the global supply of tea that remains is high and that will impact on overall prices and earnings,” Tiampati told a media briefing.

“The favourable weather conditions experienced in 2013 through 2014 led to an oversupply of tea which triggered a significant drop in prices,” he added.

The volume of green leaf produced by small-scale farmers remained flat at 1.1 billion kg over the period compared with the previous year, KTDA said

In the previous 2012/13 financial year, the KTDA posted record earnings of 69 billion shillings as a result of better farm husbandry, efficient factory processes, favourable exchange rates and increased auction prices.

KTDA represents about 500,000 small-scale farmers who produce an average 60 per cent of the country’s total output.

Kenya is the leading global exporter of black tea, and exports of the commodity raked in about $1.3 billion last year in an economy that also relies on speciality coffee, horticulture and tourism for hard currency inflows.

Kenya’s tea exports rose slightly in the first six months of the year, while average prices at the auction dipped, the country’s tea regulator has previously said.

Kenyan agricultural firms Kakuzi, Williamson Tea , Kapchorua Tea and Sasini have reported lower earnings this year on lower prices. (1 US dollar = 89.3000 Kenyan shilling) (Writing by James Macharia; editing by Susan Thomas)

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