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Kenyan tea price supported by Indian supply tightness

September 18, 2020

1 mins read

Kenyan tea exports fell marginally by 1.3% to 289 million kgs year-on-year (y-o-y) during January-to-July 2020, according to Agriculture Food Authority’s Tea Directorate. Pakistan remained the main destination market, accounting for 34% of Kenyan tea exports during this period, followed by Egypt (19%) and the UK (10%). Higher y-o-y exports in Q1 2020 were counterbalanced by lower sales through Q2 2020 and July. The main challenges noted during the COVD-19 pandemic are bottlenecks in warehousing and distribution, juxtaposed against robust Kenyan supply.

Kenya is the world’s top black tea exporter with almost 25% of global export volumes in a typical year. Kenyan tea production benefits from good weather and all-year-round harvesting and output has so far increased by approximately 28% y-o-y in the first seven months of 2020. At the same time, the supply issues attributable to the pandemic are contributing to record Kenyan stockpiles, weighing on domestic prices. Mombasa auction tea prices fell by 16% between January and July 2020 to KES 191/kg (GBP 1.36/kg), although tight Indian tea supply is now supporting the Kenyan auction price, which rose to KES 217/kg (GBP 1.49/kg) in August. This latest price is the highest point since January 2020, attributable to severe floods significantly dampening the Indian tea crop, fuelling a spike in demand for Kenyan tea.Slide1-Sep-18-2020-03-42-11-44-PM


Topics: Beverages
Ibi Idoniboye
Ibi Idoniboye

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