The price of one kilogram of tea has dropped from Sh226 to Sh221 over the last one week at the Mombasa auction representing a 20 month due to the cold weather that has led to drop in production of tea.
Data from the Tea Directorate reveal that tea volume sales dropped by 167,189kg this week and this has led to the cumulative increase in price per kilo of tea from Sh276 last year to Sh300 currently.
However, despite the drop in production, the directorate reports that total earnings from teal sales in the first six months of 2018 recorded an increase of Sh1.95bn from Sh39.75bn in 2017 to Sh41.70bn.
This was due to increase in tea production within the first five months of 2018 from 160m kilos to 187m kilos.
Tea picking in Kenya. Courtesy
Tea is the second leading foreign exchange in Kenya after diaspora remittances. In 2017 tea earned Kenya Sh129bn up from Sh120bn in 2016.
The area under tea increased by 6.5 per cent from 218.5 thousand hectares in 2016 to 232.7 thousand hectares in 2017 according to the 2018 Economic Survey report.
However, production of tea reduced by seven per cent from 473.0 thousand tonnes in 2016 to 439.8 thousand tonnes in 2017.
In this, tea production by small holder growers decreased by 7.3 per cent to 246.1 thousand tonnes in 2017 while output within the tea estates declined by 6.6 per cent to 193.7 thousand tonnes over the same period.
The depressed tea production was attributed to the drought that was experienced during the first half of 2017. The average yield for the small holder growers decreased from 2,086.4 kilograms per hectare in 2016 to 1,913.7 kilograms per hectare in 2017 while that within the tea estates decreased from 2,908.8 kilograms per hectare in 2016 to 2,603.5 kilograms per hectare in 2017.