Smiles to Farmers Tea Export Earnings Hit 129 Billion Shillings

Tea export earnings hit 129 billion shillings in 2017 marking a 7.5 percent on a year to year growth.

The increase was mainly attributed to the rise in global tea prices and a stable USDKES exchange rate in the year

A kilogram of tea averaged 303 shillings at the Mombasa auction as compared to 240 shillings recorded in the prior year while the Shilling depreciated a marginal 0.67 percent against the US dollar in 2017.

Export volume dropped 13.54 percent y/y last year to settle at 415 million kilograms.

“We view tea production will improve in the year bolstered by improved weather. Lately, the dollar has been weighed down by mounting speculation that global central banks may also pursue rate tightening paths in the year,” said analysts from Genghis Capital.

The dollar is set to be uplifted by the tax cuts implemented last December and continued rate tightening; which will boost the export value in the year.

“We expect a slow week after the robust trading seen last week and focus are still expected around the medium-term tenors and infrastructure bonds. However, attention will shift to February’s bond offer with the auction committee expected to meet tomorrow. Our expectation is that the CBK will continue to extend the maturity profile so we may see a combination of bonds; one with a short tenor and the other long. Liquidity continues to improve with the overnight rate closing at 5.6% on Friday,”