Tea volumes at Mombasa auction dip as drought ravages the region

The volume of tea auctioned at the Mombasa bourse has gone down significantly, with officials warning the trend may worsen in the next decade due to erratic weather.

Latest figures from the East African Tea Trade Association (EATTA) show the volume of tea offered on the auction dipped by almost 500,000 kilogrammes in the last trade, the second time in a row the quantities have declined in less than a month.

EATTA managing director Edward Mudibo said the decline in volume of tea offered for sale at the Mombasa auction was as a result of ongoing drought.

“Kenyan tea contributes about 60 percent of tea traded in the auction followed by Uganda at eight percent. Rwanda, Burundi and Tanzania come third, fourth and fifth respectively. The total volume traded for Sale 39 was 407,913 kilos less than Sale 38, which was as a result of ongoing drought,” said Mudibo.

During the last sale at the auction, the average price increased to $2.27 from $2.25 in the previous sale.

Demand was reduced for the 181,340 packages (12,077,628kg) on offer, with about 120,480 packages (7,952,000kg) being sold, and 33.56 percent of packages remaining unsold.

Last month, Rhoda Ruto, a senior researcher at Kenya Agricultural and Livestock Research Organisation’s Tea Research Institute warned that tea production will be affected by increased temperature as a result of global warming.

“More effect of climate change on crops will be felt in Kenya’s tea sector as an increase in temperature beyond 23.5 degrees Celsius would significantly reduce yields of the cash crop,” she said.

Climate change has the potential to significantly affect smallscale farmers’ livelihoods.

Extremely low temperatures also affect tea production, with frosts cutting yield per bush.

Ruto, however, noted that climate change will enhance the suitability of tea production in areas where the crop is today not grown, especially the higher altitudes around Mount Kenya.

Kenya’s temperature will rise by 2.5 degrees Celsius between 2000 and 2050, according to a report by the Food and Agriculture Organisation (FAO). The country will experience extreme rainfall events, especially in the Rift Valley region.

Kenya’s yearly and monthly rainfall and mean air temperatures are expected to increase moderately by 2025, according the report, which will impact the very taste of tea.

Tanzania has also witnessed a decline in tea production over the past three years according to recent data.

Statistics from data aggregation portal Statista show that Tanzania produced 20,400 tonnes of tea in 2020/2021, a five-year low compared to 27,000 tonnes (2016/2017), 34,000 tonnes (2017/2018), a peak of 37,200 tonnes in 2018/2019 and 28,700 tonnes in 2019/2020.

Tanzania affected

According to the Tanzania Public Tea Company (Tatepa), a leading exporter of tea from Tanzania, production is being effected by weather patterns.

The firm said in a report that its subsidiary, the Wakulima Tea Company (Watco), decreased production due to climate constraints and as a consequence it made financial losses.

“During the year tea production decreased by three per cent as compared to 2018. This was due to weather conditions in 2019. The average selling price of $1.67 per kg was lower than last year’s price of $1.90 kg. The lower price was due to lower world prices,” said the firm.

Tatepa made a loss before tax of Tsh715 million ($305,444) in 2019 compared to 2018 where it garnered a profit of Tsh898 million ($383,621).

The listed firm also experienced bad debts amounting to Tsh452.9 million ($193,508) and disposed of its Kyimbila Tea Packing Company, also on a loss basis that year.

Tatepa is involved in growing, processing, blending, marketing and distributing tea. It three subsidiaries are Watco, Kibena Tea and Chai Bora.

While Watco and Kibena grow and process the commodity, Chai Bora is involved in blending, packaging and marketing of packed tea for local and export.

Tanzania exports fermented and partially fermented tea to Britain, South Africa, Russia, Pakistan and Poland among other countries.

Other major tea-producing countries including India, Sri Lanka and China are also facing rising temperatures and extreme weather that could affect their tea production, the FAO report noted.

Kenya is the largest producer of black tea in the world while China leads in green tea production.

Source


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