This archive report was first published on 3 August 2019.
Kenya's tea industry is facing a crisis as prices have slumped to their lowest level in at least five years. According to the East African Tea Trade Association (EATTA), the average price of Kenyan tea at the weekly auction in Mombasa has fallen to Sh185.49 (USD 1.80) per kilogram.
This is a significant drop from last year's average price of Sh265.87 (USD 2.58) and the industry's cost of production of around Sh206 (USD 2). The last time average weekly prices dipped below Sh206.10 (USD 2) was in 2014.
The oversupply is attributed to stocks held over from last year's bumper tea crop, which was exacerbated by a global surplus of 240 million kg. Economic challenges in top importers of Kenyan tea, including Pakistan, Egypt, and Britain, have also led to a reduction in demand.
Edward Mudibo, EATTA managing director, called for action to stem the glut, saying, “The farmers should face the reality that they will not get a good bonus this year, it will be lower than last year.” He also urged farmers to switch to speciality teas, like purple tea, which attract higher prices from health-conscious consumers.
Kenya's tea industry relies heavily on exports, with only 5 percent of the more than 400 million kg of annual production consumed locally.
