Monday, May 10, 2010

World Tea news - Tea growers to make good returns this year

 By By Catherine Riungu     

Posted Monday, May 10 2010 at 00:00

Kenya is scoring a double in the tea industry — both prices and production levels have remained high, a situation the regulator says is likely to prevail throughout the year as the country enjoys good rains.

The development is good news for farmers who last year earned the highest end-of-year payments in 25 years, averaging Ksh40 ($0.54) per kg.
The Kenya Tea Development Agency (KTDA), which is battling a proposed Bill to wrestle the small-scale tea farmers from its control, also increased the monthly payments from Ksh10 ($0.13) to Ksh12 ($0.16) from January.

Unlike last year when it was unable to supply fertilisers due to high costs, the commodity is in plenty supply this year.

Also on the increase is the number of countries buying Kenya’s tea, rising to 38 from 35 in 2009 and 2008 respectively.

Industry players had predicted that increased production would cause the good prices enjoyed at the peak of the drought last year to fall but reports from the Tea Board of Kenya indicate the party is still on.

The board managing director Sicily Kariuki said the prices were unlikely to come down even with increased production because traders would not reduce them at supermarket level, sentiments shared by her counterpart at the KTDA, Lerionka Tiampati.

Adequate rainfall

Production for the first quarter of this year stood at 111 million kgs, a 69 per cent increase over the 65.8 million kgs recorded in the first quarter of last year.

The improved performance is attributed to rainfall experienced in the first two months of the year as opposed to the dry conditions that are characteristic of the period.

Production for the first quarter of 2010 was the highest that the industry has recorded in the past five years for the same period.

The output was higher by 58 per cent compared with 70 million kgs recorded in the same period in 2008.

Compared with the first quarter of this year, tea growing regions East of Rift recorded the highest increase of a 100 per cent from 23.3 million kg to 46.8 million kg.

West of Rift recorded a production increase of 52 per cent from 42.4 million kg to 64.8 million kg.

During the first quarter of the year, the smallholder sub-sector recorded an increased production of 75 per cent from 37.4 million kg recorded in the first quarter of 2009 to 65.8 million Kg while the plantation sub-sector registered a 61 per cent increase in production from 28.3 million Kg to 45.9 million Kg.

Out of the total production, the smallholder sub-sector contributed 59 per cent while the plantation sub-sector contributed 41 per cent.

From the global perspective, world tea output has gradually recovered from lower production occasioned by drought experienced across the major producing countries in 2009.

Among the major tea producers, Sri Lanka registered 69 per cent (21.2 million kg) higher crop for the period up to February 2010 compared with the same period last year.

With regard to black CTC tea, India’s tea production was higher by 22 per cent (8.2 million kg) for the same period.

However, India’s tea production for the period up to February was lower than that of Kenya and Sri-Lanka due to the winter season experienced in North India from December 2009 to February this year.

In the first quarter of the year, the volume of Kenyan tea sold through Mombasa Auction stood at 72.1 million kgs, which was 22 per cent higher compared with 59 million kg sold during the same period last year.

The average price for Kenyan tea was higher at $3.04 per kg compared with $2.31 recorded in the same period in 2009.

During the quarter, prices were higher than the same period of last year by over 15 per cent.

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