Tea production-Kenya - High tea prices are expected to persist in international markets following reports that major world producer India's February production dropped by more than a tenth. This, however, may be a boon to local farmers and boost Kenya's foreign exchange earnings. New market data showed that harvests continued to fall in major world producers mainly due to rainfall shortages. In January alone, there was a decline of about 14 million kilogrammes in the combined output of India, Kenya, Sri Lanka, Bangladesh and Malawi. "Supply remains shaky world over and the demand for the available offers will hold for now," a trader, Mr Peter Mwangi, said in an interview.

During last week's sale at the Mombasa tea auction, Kenyan tea fetched an average Sh235 ($2.84) per kilogramme, maintaining its run as the highest earner in terms of international prices.

Dry weather

The Tea Board of Kenya (TBK) last month said frost and dry weather had halved some of the production of tea processing firms in the main Rift Valley producing areas.

Statistics by the TBK showed Kenya's tea production fell a record 4.5 per cent to 35.9 million kg in January, compared with the same month a year ago due to hot, dry weather, while exports also fell.

Exports by the world's biggest exporter of black tea fell 14 per cent to 33.6 million kg in January.

Similar predicament has also befallen India, raising hopes for better earnings due to improved demand in the international market.

India is the world's second biggest producer of tea after China but shares a lot in common with Kenya in terms of target markets and the type of tea produced.

Both countries export CTC (crush, tear, curl) tea mainly to Egypt, Pakistan and the UK, and the premium orthodox variety to Iraq, Iran and Russia.

The Asian nation's exports in February 2011 fell 11.2 per cent to 11.9 million kg from 13.4 million kg a year ago, Reuters said on Friday quoting data released by the Tea Board of India. India's tea exports in the first two months of 2011 were down 9.2 per cent on year to 27.7 million kg, the data showed.

The country's tea production in February 2011 fell by 7.2 per cent to 16.7 million kg from 18 million kg a year ago, the board said.

Data by the Africa Tea Brokers Limited (ATB) showed that production is Sri Lanka also fell by 9.3 per cent to 21.7 million kg in February.

Allan Odhiambo

Business Daily/11/04/2011