High world tea prices in 2012 boost earnings for EA farmers

Tea picking. Tea farmers in East Africa posted higher earnings from exports in 2012 due to a sharp rise in international prices despite a decline in output across the region, new data shows. Photo/FILE  Nation Media Group

By ISAAC KHISA The EastAfrican

IN SUMMARY

• Industry regulatory authorities in Uganda, Burundi, Tanzania, Kenya, and Rwanda have told The EastAfrican that increased world prices boosted farmers’ earnings despite the drought experienced in Kenya and Rwanda at the beginning of last year, which affected production.
• According to East African Tea Traders Association (EATTA) the price of tea at the auction averaged $2.88 per kilogramme last year compared with $2.72 per kilogramme in 2011.

Tea farmers in East Africa posted higher earnings from exports in 2012 due to a sharp rise in international prices despite a decline in output across the region, new data shows.

Industry regulatory authorities in Uganda, Burundi, Tanzania, Kenya, and Rwanda have toldThe EastAfrican that increased world prices boosted farmers’ earnings despite the drought experienced in Kenya and Rwanda at the beginning of last year, which affected production.

Tea Board of Kenya managing director Sicily Kariuki said Kenya’s tea industry earned $1.45 billion in 2012, a four per cent increase from the $1.39 billion earned in the previous year due to improved prices, despite the drought earlier in the year as well as the delayed onset of the long rains, which lowered production. 

According to East African Tea Traders Association (EATTA), which manages the Mombasa Tea Auction — the largest black tea auction in the world — the price of tea at the auction averaged $2.88 per kilogramme last year compared with $2.72 per kilogramme in 2011.

Prices of Kenyan tea at the auction increased seven per cent to $3.18 per kilogramme, according to EATTA data.

According to the Tea Board of Kenya, the country recorded a two per cent drop in production as output stood at 369 million kilogrammes compared with 377.9 million kilogrammes in 2011.

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Similarly, Rwanda’s tea production for 2012 fell to 22.563 million kilogrammes compared with 24.067 million kilogrammes in 2011 but earnings were boosted by an increase in international prices to $3 per kilogramme last year from $2.78 per kilogramme in 2011.

The increase in tea prices on the international market resulted in a six per cent increase in tea export revenues, to $65.7 million in 2012 from $61.9 million in 2011.

“The drop in production is attributed to the severe drought that the country experienced in early 2012 coupled with heavy rains mid last year,” said Corneille Ntakirutimana, the deputy director general in charge of production and chain development at the National Agricultural Export Board in Rwanda.

On the other hand, Tanzania recorded a 20 per cent increase in tea export earnings in 2012 due to an increase in prices at the international market coupled with an increase in production.

Mathias Assenga, the director general of the Tea Board of Tanzania said the country believes it will earn more this year due to continued rise in tea prices and early rains that have been experienced in the country’s tea growing areas.

“On average, we were selling our tea at $1.91 per kilogramme last year compared with $1.69 per kilogramme in 2011. This year, we are expecting slightly higher revenues because the prices have again gone up, to $2 per kilogramme,” said Mr Assenga.

Uganda and Burundi, too, experienced a slight increase in tea export volumes compared with the previous year.

George Ssekitoleko, the executive secretary of the Uganda Tea Association told The EastAfrican that Uganda exported 48.5 million kilogrammes of tea worth $101.85 in 2012 compared with 47.95 million kilogrammes valued at $92.54 million exported in the previous year.

Additional reporting by Alex Ngaramb
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