The Hindu Business Line : Steep fall likely in Kenya’s tea production

“In first two quarters of this year, we had good crops due to favourable weather condition but from the third quarter the production suffered due to delayed rains and hailstorm,” according to Mr Dunstan M. Ngumo, Chairman, and Ms Sicily K. Kariuki, Managing Director, Tea Board of Kenya. “It is difficult to precisely estimate right now the exact production for the current year, all we can say it will be higher than last year.”

Talking to newspersons on the sidelines of the India International Tea Convention 2007 here on Friday, Ms Kariuki said the increased production had its impact on the prices. The average price of the Kenyan tea this year ranged between $1.5 and $1.75 per kg compared with $2 last year.

Margins

With the cost of production rising, the margin is clearly under pressure. Nearly 95 per cent of the country’s production is exported, with Pakistan importing about 85 to 90 million kg.

Both India and Kenya being two major producers and exporters of CTC teas, the level of production in one country is keenly watched by the other. In India, there is a production shortfall of more than 17 million kg between January and September this year vis-À-vis the same period last year.

Meanwhile, on Thursday the officials of Tea Boards of India and Kenya discussed at length on how to push forward the formation of International Tea Producers’ Forum, first conceptualised in Nairobi a year ago and discussed again in Colombo this August.

Tea forum

Thursday’s meeting, Mr Ngumo said, discussed the instruments of governance of the proposed forum, the rules and procedures, and the rules of agreement between the individual tea producing country and the forum. Although, only six of the total 25 tea-producing countries were involved in the preliminary rounds of discussion in Nairobi and Colombo, the Guwahati meeting was attended by only two countries but with approvals from others.

Mr Ngumo now heads the core committee of tea producers entrusted with the job of preparing the constitution and finalising others details prior to the formal formation of the forum. Kenya also headed the Inter-Government Group on Tea under the Food and Agriculture Organisation (FAC), the UN body.

“The sum and substance of our discussion in Guwahati on Thursday will be sent to all 25 tea-producing countries for their opinions and hopefully they will firm up their views in May, when the tea producers will meet in China to expedite the formation of the forum,” Mr Ngumo said.

In May, China will take over the chairmanship of both the FAO Inter Government group on Tea and the core committee on the proposed Forum. “We want all tea producing countries to join our Forum,” he added.