07 January 1999
Kenya encouraged by first tea sale

THE years first tea auction in Mombassa has proved encouraging news for Kenyas tea growers.

Strong demand from Egypt, Pakistan and the UK pushed prices up by 5 to 20US¢/kg from December.

The price rise has been achieved on the back of a production improvement.

Kenyas growers reaped 290 million or more tonnes of processed tea in 1998, well above predictions of between 280m to 285m tonnes.

The news comes at a difficult time for the Kenyan industry while the country liberalises its small-holder sector.

For some time, the development, processing and marketing of smallholder tea, was dominated by the Kenya Tea Development Authority.

But over the past few months, smallholders have been given an increasing control over their businesses.

There is concern that tea exporters will approach growers directly rather than go through the auction process.

There is also worry about market stagnation among Kenyas three main purchasers, which account for more than 80% of exports.

Some observers are calling for the sector to become increasingly concerned at marketing its products outside this triumvirate.

  • Financial Times 07/01/99 page 36