Finlay Mombasa Ltd employees arrange various types of tea for testing at
the company’s laboratory before they are packed for export. PHOTO |
FILE | NATION MEDIA GROUP
The decline of international market for the cut-tear-curl (CTC)
black tea has pushed Kenyan exporters to premium tea as the next best
bet for the industry.
The first tea auction of 2020 at
the Mombasa Tea Auction registered the first premium orthodox tea export
by Empire Kenya EPZ Ltd to Sri Lanka.
But managing
director Thushara De Silva has called on the government of Kenya to
“initiate trade agreements with our source markets since they charge 15
per cent tax for packaged tea, which is discouraging export of packaged
tea.”
Empire Kenya’s orthodox tea shipment to Sri Lanka
is specially branded with packaging depicting the Big Five animals
associated with Kenya for marketing and the promotion of the country’s
tourism.
The company plans to export orthodox tea to Sri Lanka, Russia, Poland and Guinea.
This
year’s auction started with high sales compared with corresponding
sales of January 2019. The first week at the auction posted improvements
both in volumes and prices with more than 10.5 million kilogrammes of
tea sold at an average price of $2.38 compared with 9.1 million
kilogrammes in the first auction in 2019 at a price low of $2.33.
Pakistan and Afghanistan emerging top buyers of East African tea in 2020.
This
year, tea players have positioned themselves to trade more on premium
orthodox tea than CTC black tea whose price is in decline in the
international market.
According to just-released
figures, Kenya and Uganda were top tea suppliers to the Mombasa Tea
Auction last year with Rwanda tea registering the highest prices during
the same period as traders had a radical shift from CTC black tea
production to premium orthodox tea brand.
Kenya offered
372,158,988 kilogrammes of tea in 2019 with an average price of $2.24
per kilogramme followed by Uganda which supplied 73,955,883 kilogrammes
at $1.16 per kilogramme.
Regional outlook
Rwanda
tea fetched the highest average price at the regional auction market at
an average price of $3.05 per kilogrammes while Tanzania and Burundi
teas were brought at an average price of $1.30 and $2.50 per kilogrammes
respectively.
Most East African tea companies
currently market their tea in different food expos such as Gulf Food
expo in Dubai and in Prodexpo in Russia and also make direct sales.
Due
to the increasing number of companies intending to venture into
orthodox tea, the East Africa Tea Traders Association (EATTA) has
renewed its push for a review of the African Growth Opportunity Act
(Agoa) to allow them access the US market.
Supply chain
EATTA managing director Edward Mudibo said the US remained the biggest market for accessing Kenyan teas using middlemen.
“Kenyan
tea has been ranked one of the best globally but it is being repackaged
by different countries, but Kenyan traders will benefit if they can
access of the US market,” said Mr Mudibo.
He added that all other commodities which are trading under Agoa have continued to increase in export value every year.
Mr Mudibo said talks were at an advanced stage to start auctioning premium tea at the Mombasa auction where only CTC teas trade.
He
said that once the required supply is attained by more companies
getting involved in sell of premium teas, the association will start a
programme to market and auction orthodox tea.
“At the
moment, companies trading orthodox tea sell direct to its markets abroad
since the volumes to auction on weekly basis have not reached the
required threshold, but we are holding talks to set required standards
even as we encourage more suppliers to maintain consistency in supply,”
he said.
Companies dealing with premium tea have
already formed Kenya Specialised Tea Association to popularise the
products such as purple and green tea products.
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