This archive report was first published on 12 August 2019.
On August 12, 2019, Limuru Tea, a listed agricultural firm, revealed a significant financial setback in the first six months of 2019, with a loss of Sh18.15 million.
This loss was a stark sevenfold increase from the Sh2.6 million loss posted in a similar period the previous year, primarily attributed to the plummeting prices of green leaf.
According to the company's chairman, Richard Korir, the decrease in revenue during the half year ended June was due to the deepening market prices experienced in 2019.
During this period, Limuru Tea produced 1,138 metric tonnes of green leaf, yielding 267 tonnes of made black tea, a five percent increase from the previous year. However, the declining tea prices meant that the firm could not fetch higher revenues on this increased output.
Tea prices started dropping from the first quarter of the year, and Korir warned that depressed market prices continue to pose a risk to the business performance.
Other tea firms have also been affected, with Eaagads Tea issuing a profit warning for the full year performance ended March, and Sasini Tea sinking into a Sh194.6 million loss for the half-year ended March.
The East African Tea Trade Association (EATTA) reported that Kenyan tea prices have slumped to their lowest level in at least five years due to a glut and weak demand in the main export markets.
