35pc tea production fall signals lower earnings

Dry weather has cut tea production by 35 per cent in quarter one 2017 compared to the same period last year, setting farmers up for lower earnings and Kenya for reduced forex inflows.
The monthly industry report—coming soon after smallholder production overseer Kenya Tea Development Agency (KTDA) said deliveries had fallen 25 per cent in nine months —indicates cumulatively production for the period was significantly lower at 90.09 million kilos against 139.60 million recorded during the corresponding period in 2016.
“Lower production was largely attributed to dry and hot weather conditions experienced in all the tea growing areas,” says the Tea Directorate report.
The most affected region was the East of Rift where production declined significantly from 20.38 million kilos to 9.85 million owing to delayed onset of the long rains season.
Green leaf delivery
The report notes that production within the West Rift decreased marginally from 24.94 million kilos recorded in March 2016 to 24.64 million kilos.
Consequently, the smallholder sub-sector recorded a significant decrease of 9.61 million kilos from 28.66 million kilos to 19.05 million kilos.
Plantation sub-sector registered a marginal drop of 1.22 million kilos from 16.66 million recorded in March 2016 to 15.44 million kilos.
“Going by the current production trend and the fact that most parts of the country are expected to receive depressed long rainfall, lower production is expected to be recorded throughout the year,” the report says.
Late last month, KTDA said green leaf delivery by farmers had dropped by a quarter to 705.2 million kilos in the nine months to March compared with 936.6 million in a similar period last year.
Production dip
The production dip and lower prices at the Mombasa Tea Auction means that KTDA is unlikely to match the Sh84 billion generated last year translating to lower earnings for the 560,000 smallholder farmers.
Prices at the auction have also been lower at an average Sh250 a kilogramme of tea in the period to March. This compares poorly to the Sh274 average for a similar period last year.
The depressed prices are mainly attributed to the surplus tea in the market carried over from last year.
Tea data shows that in the year ending June 2016, the global tea market had a surplus of 179 million kilogrammes. This extra tea has kept prices low in the current year despite the depressed production.

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