First quarter tea exports, prices decline on Corona woes

East Africa Tea Trade Association MD Edward Mudibo. FILE PHOTO | NMG 

By GERALD ANDAE
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Summary

• Exports to Pakistan dipped 15 percent while Egypt and the United Kingdom recorded declines of 10 percent each, pointing to reduced orders and demand impacting negatively on prices.
• Pakistan, Kenya’s main market for tea, saw its import volumes decline to 42 million kilos from 49.3 million kilos in the previous quarter.
• Egypt registered a decline of 2.8 million kilos with the UK shedding 1.3 million kilos.

Tea exports to top three markets declined significantly in the first quarter as the world grappled with the Covid-19 pandemic and its impact on global trade.

Data from the Tea Directorate shows exports to Pakistan dipped 15 percent while Egypt and the United Kingdom recorded declines of 10 percent each, pointing to reduced orders and demand impacting negatively on prices.

Pakistan, Kenya’s main market for tea, saw its import volumes decline to 42 million kilos from 49.3 million kilos in the previous quarter. Egypt registered a decline of 2.8 million kilos with the UK shedding 1.3 million kilos.

“Lower prices at the auction were attributed to increased supply coupled by depressed demand in the global tea markets occasioned by disruption and restrictions of movement due to the Covid-19 pandemic,” said the directorate.

The average auction price in the review period stood at Sh225 a kilo down from Sh233 in the previous quarter.

East African Tea Traders Association (Eatta) managing director Edward Mudibo said the demand at the auction, previously driven by panic buying, has now gone down.

“In the last eight weeks prices at the auction have registered a mixed bag. In the latest auctions, they have been down on account of reduced demand but it is important to note that the volumes withdrawn from the auction floor have gone down,” he said.

Mr Mudibo said the auction performance trends over the initial past four sales have kept on improving despite the challenges posed by the Covid-19 pandemic, but there has been a slight decline in prices in the last one month.

Overall, tea exports to all the destinations were six percent down in the first quarter of the year compared to 2019.

Data from the regulator shows the volumes went down to 128 million kilos from previous 137 million.

High demand in the world market had boosted Kenyan tea last month following a lockdown in India, which supplies more than two million kilos globally. Kenya moved in to fill the void, a move that saw a kilo of tea shoot to an average of Sh224, the highest this year.