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TEA MARKET DEVELOPMENT IN KENYA
Agriculture, Fisheries and Food Authority(AFFA)
TEA DIRECTORATE
Samuel OgolaTechnical Services Manager-Tea Directorate
Contribution to Economy
Tea Contributes immensely to socio-economic development of the country:• It is the leading foreign exchange earner-23% of the total foreign
exchange earnings. • 4% of the GDP.• livelihood support to over 5 million Kenyans. • Contributes to Rural development.• In 2013, the tea industry earned the country Kshs. 114 Billion (Usd
1.33 Billion) in export earnings and Kshs. 22 Billion (Usd 0.26) in local sales.
Role In the Industry
Regulation and compliance Industry planning and development Industry advocacy Trade and promotion Organizational capacity and service
delivery enhancement
Key Industry Statistics
2011 2012 2013
No.of Growers
Total 639,521 627,938 614,159Smallholder 606,744 595,152 575,103Plantation 32,777 32,786 39,056
Hectarage
Total 187,855 190,717 198,657Smallholder 123,385 124,985 127,352Plantation 64,470 65,732 71,305
No.of factories
Total 104 105 107Smallholder 64 64 64Plantation 40 41 43
Stabilized Production levels (Million Kgs)
2009 2010 2011 2012 20130
50
100
150
200
250
300
350
400
450
500
314
399377 369
432
f(x) = 20.6 x + 316.4
Year
Mad
e Te
a (M
illio
n Kg
s)
Export Trends (Million Kgs)
2009 2010 2011 2012 20130.00
100.00
200.00
300.00
400.00
500.00
600.00
342.48
441.02421.27 430.20
494.35
Year
Mill
ion
Kgs
Increasing Export Values (billion K.sh)
2009 2010 2011 2012 20130
20
40
60
80
100
120
69
97
109 112 114
Year
Billi
on K
.sh
Efforts to Grow Exports(2009-2013)
PAKISTAN EGYPT UK AFGHANISTAN SUDAN EMERGING TOTAL
-5%
0%
5%
10%
15%
20%
25%
10%
1%
-1%
22%
7%
8%
6%
Improving Local Consumption (Million Kgs)
2009 2010 2011 2012 20130
5
10
15
20
25
30
1819
20
22.7
26
MILL
ION
KGS
Global Supply/Demand Trend (Million Kgs)
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -
250 500 750
1,000 1,250 1,500 1,750 2,000 2,250 2,500 2,750 3,000 3,250 3,500 3,750 4,000 4,250 4,500 4,750 5,000 5,250
Supply Demand
Million Kgs
Declining Tea Auction Prices (2013-2014-To Date)
13-1
13-3
13-5
13-7
13-9
13-1
1
13-1
3
13-1
5
13-1
7
13-1
9
13-2
1
13-2
3
13-2
5
13-2
7
13-2
9
13-3
1
13-3
3
13-3
5
13-3
7
13-3
9
13-4
1
13-4
3
13-4
5
13-4
7
13-4
9
13-5
1
14-2
14-4
14-6
14-8
14-1
0
14-1
2
14-1
4
14-1
6
14-1
8
14-2
0
14-2
2
14-2
4
14-2
6
14-2
8
14-3
00.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
Auction No.
Pric
e (U
SD/K
gof M
ade
Tea)
Our Challenges
Sustained increase in production (Black CTC tea) leading to global oversupply.
Global supply is growing at higher rate than demand by about 3% annually.
Slow adaptation to product and Market diversification e.g “Orthodox ,Specialty teas etc. .
Origin Branding Low consumption patterns in Africa.
Continued
Declining Tea prices leading to Reduced grower earnings (30%)
Rising Cost of Production (COP); Many private standards and diverse regulatory
requirements by respective importing countries. Low innovation along the value chain
Opportunities to Promote Tea
Promotion of value addition for Kenya teas, a target of 20% has been projected:
Increased populations in Africa and Asia Increased awareness of health benefits of tea in
Europe and America . Increased income levels and expanding middle
class globally . Low consumption in Africa ,currently Africa has a
population of 1.1 Billion with a low consumption of 0.30kg per capita
15. Continued …….
Promotion of tea based on Origin. Adopting product diversification and innovation
e.g Purple tea, Orthodox tea, White tea e.t.c. Adoption of cottage Industry models to promote
specialty and niche teas segments.
Conclusion ……….
Prepared a National Tea Policy towards improving competitiveness and sustainability of the Industry.
Developed Kenya Climate Change Strategy for the Tea Industry in collaboration with FAO .
Automation of the tea Auction with a view to improving transparency and enlarge competition;
Commissioned a study on Price Stabilization Fund (PSF)and Min. Greenleaf rate to the growers .
Thank You!Agriculture, Fisheries and Food Authority(AFFA)
TEA DIRECTORATE