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Tea Production in Modest Growth

The East African Standard (Nairobi)
Posted to the web December 29, 2005
Benson Kathuri

Tea production hit 298 million kilogrammes this year, a three per cent growth.

The Tea Board of Kenya attributed the increase to favourable weather conditions in
most producing areas.

"Increased production during the period was attributed to favourable weather
conditions characterised by well distributed rainfall in growing regions," said Phrasia
Mwangi, TBK acting Managing Director.

The board said the good weather condition was particularly favourable in the East of
Rift Valley that recorded higher output during the months of October and November.

High production was also attributed to enhanced processing capacity within tea
growing regions, occasioned by commissioning of nine new factories over the last five
years. She said the increased processing capacity had cut the amount of green leaf
that went to waste during flush periods.

"Compared to the estate tea sub-sector, the smallholder sub-sector, which is
predominant within the East of Rift recorded the highest growth of 3.4 per cent and
accounted for 60 per cent of the national output," she said.

"With the production for December projected at about 30 million kg, the total crop for
this year is expected to hit an all time high of 328 million kg," she says.

The increased production comes in the wake of falling prices in the international
market due to over-supply.

The board says during the January-November period, export volume increased by 3.9
per cent to hit 317 million kg worth Sh38.9 billion.

This compared with 305 million kg valued at Sh39.7 billion sold during a similar period
last year.

However, the export price per kg declined by six per cent to Sh123 from Sh130
recorded last year.

"The drop in export price per kg was largely attributed to appreciation of the Shilling
against the US dollar," says Mwangi.

Tea was exported to 52 markets, with Pakistan importing 88.5 million kg that
accounted for about 28 per cent of the share.

Despite the trade dispute between Kenya and Pakistan earlier in the year over import
duty on rice under the East African Customs Union protocol, exports to Pakistan grew
by 17 per cent compared to January-November 2004 sales.

Duty rate on rice imported from Pakistan was raised from 35 per cent to 75 per cent,
prompting a protest from Pakistan who threatened to impose a similar duty on Kenya's
tea export.

However, the dispute was resolved after the duty was restored to 35 per cent.
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