Kenya tea output falls

Aug 30, 2009

NAIROBI<br><br>Kenya’s tea output fell 11% in July to 21.5 million kgs compared with the same month last year due to cold weather in some areas and drought conditions in others, the Tea Board of Kenya said on Friday.

NAIROBI

Kenya’s tea output fell 11% in July to 21.5 million kgs compared with the same month last year due to cold weather in some areas and drought conditions in others, the Tea Board of Kenya said on Friday.

The June-August cold season in Kenya -- the world’s biggest exporter of black tea -- is traditionally associated with slow leaf development and supply shortfalls.

“Lower output for the month was largely attributed to the effects of cold and dry weather conditions experienced in tea growing areas,” the board said in a statement, adding temperatures ranged between 8-21 degree Celsius in July.

Total production in the first seven months of 2009 came in at 160.7 million kgs, 11.4% down from tea made in the same period last year.

Tea prices at the Kenyan auction have risen to record levels in recent weeks as buyers snapped up available volumes ahead of the Muslim holy month of Ramadan and because a prolonged drought in the country sparked supply fears.

Two of the biggest buyers of Kenya tea, Pakistan and Egypt, have big Muslim populations.

The tea board said the average auction price so far this year stands at $2.49 per kg compared with $2.38 recorded during the same period last year.

Meanwhile, Kenya traders expect tea prices to return to normal by the end of the year from record highs on forecasts the drought-stricken east African country will get above average rainfall soon, the head of a trade body said on Friday.

Tea offered at the weekly auction in Mombasa has fetched high prices most of this year with buyers stocking up as drought in the world’s biggest exporter of black tea cut production.

“We predict prices will return to normal because the rains are expected to return,” said Kipkirui arap Lang’at, East Africa Tea Trade Association’s managing director.

“When we close the year -- after 50 auctions -- we anticipate the drop by volume to be less than 10 percent, but because of the rise in price we will probably do the same or better than last year,” he told Reuters.

The Tea Board of Kenya said on Friday the average auction price so far this year stands at $2.49 per kg compared with $2.38 in the same period last year.

Reuters

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