Business

Tea exports fall on Covid-19 curbs

Tea exports fall on Covid-19 curbs
  • Data from the Tea Directorate shows exports to Pakistan dipped 15 per cent, while Egypt and the United Kingdom recorded declines of 10 per cent each, pointing to reduced orders and demand and hurting prices.
  • The average auction price in the review period stood at Sh225 a kilo, down from Sh233 in the previous quarter.

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 per cent, while Egypt and the United Kingdom recorded declines of 10 per cent each, pointing to reduced orders and demand and hurting 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.

RESTRICTED MOVEMENT

“Lower prices at the auction were attributed to increased supply, coupled with 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 past 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the latest auctions, they have been down on account of reduced demand, but it is important to note that the volumes withdrawn from the auction floor have gone down,” said Mr Mudibo.

AUCTION

He said the auction performance trends over the 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 past one month.

Overall, tea exports to all the destinations were down six per cent in the first quarter of this year compared to last year.

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

Kenyan was last month been boosted by high demand in the world market following a lockdown in India, which supplies over two million kilos globally.

Kenya moved in to fill the void created by India, a move that saw a kilo of tea shoot up to an average of Sh224, the highest recorded this year.