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Oversupply Causes A 13.3 Percent Dip In Tea Prices

The Kenya Tea Development Agency (KTDA) has recorded a 13.3 percent dip in tea prices in its factories in the last seven months to January.

The prices have dropped to $2.22 (Ksh240) from $2.56 (Ksh280) for a similar seven-month period in the previous financial year.

Green leaf deliveries however dropped to 726 million kilos in the seven months compared to 770 million kilos in a similar period the year before.

“The high production coupled with the high volumes in the global supply chain has kept the prices at the auction depressed,” KTDA managing director Alfred Njagi said.

Read: KTDA Chairman, CEO Set To Resign As Changes Sweep Across The Tea Sector

According to Kenya National Bureau of Statistics data, smallholder tea farmers across the country have been increasing acreage under tea, which stood at 163,000 hectares in 2019 up from 141,800 hectares in 2018.

The farmers recorded a 28.7 percent increase in production of green leaf in the financial year 2019/2020, reaching 1.454 billion kilograms of green leaf, up from 1.13 billion kilograms the previous year.

The price of tea has been on the downward trend in the last three years, owing to the increased global production.

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