Kenyan farmers grind black (tea)

Green gold has rarely been so poorly named: with an average price of less than $2 per kilo, prices have reached their lowest level since 2014, according to the East African Tea Trade Association (EATTA), the umbrella organization representing the interests of the sector in the sub-region.

In the port city of Mombasa, one of the world’s largest tea auctions, EATTA reported on Friday that the average price had even dropped to $1.80 per kilo during the last weekly sales. A worrying low price for the country’s tea sector, the world’s largest exporter of black tea (95% of production is sold internationally), which is one of the main sources of national currency along with tourism, flower exports and remittances from the diaspora. As a reminder, in 2018, the average price per kilo of tea was estimated at $2.58, with a production cost of around $2 according to Edward Mudibo, EATTA’s Executive Director, quoted by Reuters.

Source : East African Tea Trade Association (EATTA)

To explain this low price, the latter argues that the main cause is the oversupply of current supply due, among other things, to the previous year’s residual stocks, Kenya having experienced an exceptional harvest in 2018. Another reason given was that global demand at half mast, as the economic difficulties faced by the three main importers of Kenyan tea – Pakistan, Egypt and Great Britain – also weighed on prices. These are all cyclical factors that support the criticism often levelled against Kenyan producers, who are too inclined to favour quantity over quality. For the EATTA leader, on the contrary, « the focus should now be on tea quality rather than volumes ». A good listener?