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A Brief Tea Export Scenerio

What we have covered in this article:-

  • Overview of Kenya’s Tea Sector: Place in Kenyan economy
    Image
    A cup of brewed black tea
  • Tea Production and consumption
  • Conformity to quality standards
  • Kenya’s Tea Exports by Category and Major Markets
  • Kenya’s tea export by category in 2009
  • Kenya’s Tea Export Markets in 2009
  • Opportunities for Tea Market for Packaged teas
  • World demand for Packaged Green tea (HS 090210)
  • World demand for Packaged Black tea (HS 090230)

1.0 Overview of Kenya’s Tea Sector: Place in Kenyan economy
Kenya’s tea industry is well developed and is among the country’s leading foreign exchange earners and contributes about 20% of the Kenya’s total export earnings.
Tea industry has ranked second to horticulture in commodity export performance since 2003, but it overtook horticulture in 2009
The tea industry is labour intensive and directly or indirectly employs about 10 per cent of Kenya’s population.
In addition, as the tea production and manufacturing are carried out in the rural areas, it has contributed to the rural industrialization and development.

Table 1: Kenya’s Top 10 Exports in 2009
 SHORT DESCRIPTIONValue (In Billion Kshs)% Share in Total Exports
1Tea    68.77 19.94
2Horticulture    65.22 18.91
3Coffee    15.31 4.44
4Apparels    13.95 4.04
5Tobacco manufactures    10.41 3.02
6Iron and Steel      9.07 2.63
7Soda Ash      8.31 2.41
8Essential Oils      8.23 2.39
9Cement      7.77 2.25
10Articles of Plastics      5.92 1.72
 All Other**  132.00 38.27
 Total exports 2009344.95100.0

1.1 Tea Production and consumption

Kenya is the world largest exporter of black tea. Total area under tea production has rapidly increased from 21,500 hectares in 1963 to about 157,700 hectares in 2008
Tea production reached 369.6 million kilograms in 2007, decreased to 314 million kilograms in 2009 and rising to 398.5 million kilograms in 2010.
The fluctuation in the tea production is attributed to varying weather conditions with favourable conditions leading to increases in volumes and unfavourable resulting in low volumes. 
Small-holder growers account for 55 per cent while the estates growers account for the 45 per cent  of the country’s total teas.
The country’s consumption levels for 2008, 2009 and 2010 were 17.38 million kilograms, 18.1 million kilograms and 18.7 million kilograms which translate to 5.1%, 4.5% and 4.7% of total production respectively.

1.2  Conformity to quality standards
Kenya’s tea is known for its reputable quality and flavour.
It is also natural and pure since it is produced from pest and disease resistant clones and thus no pesticides or other chemicals are used.
The best tea quality in Kenya is guaranteed through quality control, which starts at harvesting where only fine plucking (only two leaves and a bud) is done; and continues all through into processing through ensuring all the processes are undertaken with care to ensure production of good quality tea
Tea processing in Kenya is also skilfully done under stringent conditions at source to ensure maximum quality. Kenyan tea designated for local and export markets comply with Kenyan and international standards on quality and food safety as the Tea Board of Kenya conducts continuous tea factories compliance audits on tea regulations and guidelines, and on aspects of good agricultural practices (GAPS), good manufacturing practices (GMPS) and best practices.

1.3 Kenya’s Tea Exports by Category and Major Markets
1.3.1 Kenya’s tea export by category in 2009

The bulk of Kenya’s tea exports are constituted by black tea in bulk and exports of green teas are still very low. The volume of value added tea sales (packaged teas) has been increased in the last decade to provide the consumers world-wide with pure Kenyan branded teas, blended at source.

Table 2: Value of Kenya’s Tea Exports; 2005- 2009 (‘000 US $)

 YEAR20052006200720082009
HS CODEPRODUCT     
090240Black tea (Bulk)511,593.12 657,369.63697,593.2919,538.73883,050.68
090230Black tea (packaged)  7,817.073,843.27 282.53 227.038,832.55
090220Green tea (Bulk) 574.85 422.47136.96 1,116.641,161.53
090210Green tea  (packaged)  417.21 149.79 45.45 61.06170.20
 TOTAL EXPORTS520,402.25661,785.16698,058.23920,943.46893,214.96

Source: Customs & Excise Dept., (compiled by Centre for Business information in Kenya (CBIK)).

1.3.2 Kenya’s Tea Export Markets in 2009
Kenya's major markets for tea in 2009 include Egypt, United Kingdom, Pakistan, Afghanistan, Sudan, Russia Federation and Yemen;
The top four countries alone accounts for about 66% of total exports and this shows a high concentration of markets.

Table 3:  Kenya’s Major Export Markets of Tea -2009

 DESTINATIONMillion KGSKSHS (Billions)Share in Value of Kenya’s Exports
1EGYPT75.39 14.37 20.65
2UK64.18 12.29 17.65
3PAKISTAN54.64 11.39 16.36
4AFGHANISTAN33.44 7.55 10.85
5SUDAN25.48 4.22 6.06
6RUSSIA13.52 2.80 4.02
7YEMEN13.33 3.08 4.42
8U.A.E.12.78 2.73 3.92
9KAZAKHSTAN9.12 2.42 3.47
10POLAND4.62 0.97 1.39
11NIGERIA3.77 0.82 1.18
 All others32.20 6.98 10.03
 TOTAL EXPORTS342.48 69.60 100.00

2.0  Opportunities for Tea Market for Packaged teas
2.1 World demand for Packaged Green tea (HS 090210)
The world demand in 2009 for packed green teas was estimated at US $ 545 million,
Overall demand for this tea category grew annually by 16% between 2005 and 2009 and top markets for this product category cover North Africa, Europe, and Americas.
Top ten countries accounted for 63% world market share.Top world importers were Morocco, USA, France, Canada and Mauritania absorbing 19%, 7.9%, 7.4%, 5.8% and 5% of world demand respectively. 

2.2 World demand for Packaged Black tea (HS 090230)
The world demand in 2009 for packed black teas was estimated at US $ 1.4 billion.
Overall demand for this tea category grew annually by 5% by value between 2005 and 2009 and the top markets for this product cover Europe, Middle East, and Americas.
Top ten countries accounted for 53% world market share. Top world importers were Saudi Arabia, Russia Fed., USA, Canada, Syria, and France absorbing 11%, 8%, 6%, 6%, 5% and 5% of the world demand respectively.

 
 
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