Kenya is the world’s leading exporter of black tea, which accounts for 95% of the country’s overall tea production and reducing the industry’s reliance on bulk black tea is a key objective for Kenya as it looks to boost revenue from one of its flagship agricultural sectors.
Last year, tea exports generated earnings of KSh125.3bn ($1.23bn), a 23% increase from 2014. However, prospects for 2016 are somewhat more muted, with overseas tea sales predicted to generate between KSh 115bn ($1.14bn) and KSh120bn ($1.19bn).
In order to ensure tea stays a major contributor to GDP whilst boosting its segment earnings, the government is working to broaden the industry’s base, diversifying production away from a dependence solely on black tea.
“We intend to unveil new guidelines for manufacturing specialty teas before the end of the second quarter. This will help increase the availability of planting material and manufacturing facilities, which are required to enable farmers embrace the new tea varieties,” said Samuel Ogola, technical services manager of The Agriculture, Fisheries and Food Authority’s Tea Directorate.
“We want to increase tea industry earnings by encouraging farmers to embrace specialty tea varieties, such as white, purple and orthodox tea, which have a higher value compared to black tea,” Ogola added.
For its part, the industry has broadly welcomed plans to expand the production base.
“Though take up of new varieties has been limited, with black tea continuing to dominate the market, there is a definite need to create product diversity,” Peter Kimanga, director of Gold Crown Beverages, told the Oxford Business Group.
“The government has done a good job of ensuring Kenyan tea is pesticide-free and ‘clean’, which is ideal for premium quality branding and in line with international preferences. This should be a key selling point.”
In addition to expanding the tea varieties produced, Kenyan producers are also looking to diversify their export markets.
At present, around 77% of the country’s output is sold to a handful of source markets – namely, Egypt, Pakistan, the UK, the UAE and Sudan, according to figures from the East Africa Tea Trading Auction (EATTA).
Looking ahead, Kenya aims to target high-growth markets, in particular China and Iran, which could offer greater market stability.
“Bilateral trade agreements should be a focus for the tea industry, as the country needs to work to open up new markets and diversify export destinations,” Edward Mudibo, managing director and chairman of the Agriculture Industries Network, told The Oxford Business Group.
Although diversification is likely to boost the sector’s sustainability and export income, Kenya’s tea industry still faces some challenges ahead.
Lower rainfall and more frequent drought conditions, as were experienced last year, have proven problematic for producers, and the risk of continued climate change may prolong those pressures.
At present, only 20% of Kenya’s landmass is suitable for non-irrigated farming, with agriculture coming under pressure from growing urbanization in regions where water is abundant.
The introduction of drought-resistant strains, such as the TRFK 306 variety, a strain of purple tea developed by the Kenya Tea Research Institute, is one response to the threat of global warming and lower rainfall in Kenya’s key tea-producing regions.
By developing and utilizing strains that require less water, Kenya’s producers may not only be able to mitigate the effects of reduced rainfall, but also offset the loss of prime arable land to urban sprawl by cultivating land that was previously seen as unsuitable for tea production.