Key commodities register mixed fortunes in 2020

Workers picking tea. FILE PHOTO | NMG

By GERALD ANDAE
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Summary

• Kenya’s major export commodities registered mixed fortunes this year with the price of tea taking a hit while coffee picked up on higher demand.
• Whereas coffee picked up in the last quarter, tea dropped significantly hitting a five-year low by the time the financial year was coming to an end in June.
• Decreased earnings for tea were attributed to low international prices where Kenya sells almost all the produce as demand was subdued by effects of the Coronavirus.

Kenya’s major export commodities registered mixed fortunes this year with the price of tea taking a hit while coffee picked up on higher demand.

Whereas coffee picked up in the last quarter, tea dropped significantly hitting a five-year low by the time the financial year was coming to an end in June.

Decreased earnings for tea were attributed to low international prices where Kenya sells almost all the produce as demand was subdued by effects of the Coronavirus.

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

Decline in prices was also due to increased volumes of green leaf from farmers.

Tea production in the first half of this year grew by 41 percent to 300.6 million kilogrammes from 212.6 million kilos in corresponding period last year on the back of good weather in quarter one, marking one of the highest volumes in recent years.

Coffee prices ended the financial year in September on a poor note but the value rallied at new crop year in October.

The value of the coffee in the last auction of the year rose significantly, crossing the $300 mark for the first time since the beginning of 2020.

A 50 kilo bag of the beverage fetched Sh34,100, up from Sh31,283 in the previous sale at the Nairobi Coffee Exchange.

The prices were boosted by a new crop coming in from central Kenya, high demand for the commodity ahead of Christmas and higher international prices.

Tea farmers are likely to face another round of reduced earnings in the current financial year as the commodity at the auction has been fetching low returns since the beginning of the 2020/2021 fiscal year.

In the latest trading a kilo fetched Sh205 on average from Sh233 in corresponding sale last year.