Russia has been the 5th-largest consumer of Kenya’s tea after the United Arab Emirates, United Kingdom, Egypt, and Pakistan.
The Tea Board of Kenya confirmed that there was a huge decline in Russia’s earnings in March, with the volumes sinking to 686,072 from 2.6 million kilos sold in a similar period last year.
Tea farmers’ earnings hit 20 billion shillings in the third quarter of the year, a 53 percent increase from the 13 billion shillings recorded in a similar period last year.
The impressive earnings were helped by the government-backed minimum price of $2.43 (291 shillings) per kilogram which protected their revenue. During the period, a kilo of tea fetched $2.65 (318 shillings), up from $2.55 (302 shillings) in a similar period last year.
According to Kenya Tea Developments Agency (KTDA), green-leaf production dropped 13 percent during the period owing to the prevailing drought. Tea deliveries to its 71 factories dropped to 197 million kilos compared to 225.8 million kilos last year.
“Prices at the auction have been fairly steady with a positive outlook expected for the coming weeks despite the market challenges faced with the Russia-Ukraine war and the flooding disaster that recently hit Pakistan,” KTDA chief executive officer Wilson Muthaura said.
Since Russia invaded Ukraine in March, shipping of the beverage to the western nations was disrupted following the blockage of shipping routes.
Russia has been the 5th-largest consumer of Kenya’s tea after the United Arab Emirates, United Kingdom, Egypt, and Pakistan. The Tea Board of Kenya confirmed that there was a huge decline in Russia’s earnings in March, with the volumes sinking to 686,072 from 2.6 million kilos sold in a similar period last year.
Pakistan which is the top consumer of Kenya’s tea has since June cut its tea consumption citing financial uncertainties. The country’s foreign exchange reserves dropped from around $16 billion (1.9 trillion shillings) in February, to less than $10 billion (1.2 trillion shillings) in the first week of June making it harder for the country to cover the cost of two months of all its imports.
The South Asian country has also witnessed extreme weather conditions since the start of the year, with recent floods leaving a third of the country underwater and leading to a humanitarian crisis.
KTDA projects an increase in earnings in the remainder of the year, as it continues with efforts to improve operational efficiencies.
These include investment in small hydropower stations for cheaper power supply, diversification to orthodox teas to reduce reliance on Black crush, tear, curl (CTC) teas, and training of farmers on income diversification and management.