TEA MARKET DEVELOPMENT IN KENYA
The Agriculture, Fisheries and Food Authority (AFFA) Tea Directorate in Kenya plays a crucial role in regulating, planning, and promoting the tea industry. With key statistics on production levels, export trends, and efforts to grow exports from 2009-2013, this sector significantly contributes to the economy through foreign exchange earnings and livelihood support to millions of Kenyans. The industry also focuses on improving local consumption while maintaining stable production levels.
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Agriculture, Fisheries and Food Authority(AFFA) TEA DIRECTORATE TEA MARKET DEVELOPMENT IN KENYA Samuel Ogola Technical 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 Total 639,521 627,938 614,159 Smallholder No.of Growers 606,744 595,152 575,103 Plantation 32,777 32,786 39,056 Total 187,855 190,717 198,657 Smallholder Hectarage 123,385 124,985 127,352 Plantation 64,470 65,732 71,305 Total 104 105 107 Smallholder No.of factories 64 64 64 Plantation 40 41 43
Stabilized Production levels (Million Kgs) 500 432 y = 20.6x + 316.4 450 399 400 377 369 350 314 300 Made Tea (Million Kgs) 250 200 150 100 50 0 2009 2010 2011 Year 2012 2013
Export Trends (Million Kgs) 600.00 494.35 500.00 441.02 430.20 421.27 400.00 342.48 Million Kgs 300.00 200.00 100.00 0.00 2009 2010 2011 Year 2012 2013
Increasing Export Values (billion K.sh) 120 114 112 109 100 97 80 Billion K.sh 69 60 40 20 0 2009 2010 2011 Year 2012 2013
Efforts to Grow Exports(2009-2013) 25% 22% 20% 15% 10% 10% 8% 7% 6% 5% 1% 0% -1% UK PAKISTAN EGYPT AFGHANISTAN SUDAN EMERGING TOTAL -5%
Improving Local Consumption (Million Kgs) 30 26 25 22.7 20 19 20 18 MILLION KGS 15 10 5 0 2009 2010 2011 2012 2013
Global Supply/Demand Trend (Million Kgs) 5,250 5,000 4,750 4,500 4,250 4,000 3,750 3,500 3,250 MILLION KGS 3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Supply Demand
Declining Tea Auction Prices (2013-2014-To Date) 3.50 3.00 2.50 2.00 Price (USD/Kgof Made Tea) 1.50 1.00 0.50 0.00 13-1 13-3 13-5 13-7 13-9 13-11 13-13 13-15 13-17 13-19 13-21 13-23 13-25 13-27 13-29 13-31 13-33 13-35 13-37 13-39 13-41 13-43 13-45 13-47 13-49 13-51 14-2 14-4 14-6 14-8 14-10 14-12 14-14 14-16 14-18 14-20 14-22 14-24 14-26 14-28 14-30 Auction No.
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
