Kenya’s tea export industry demonstrated resilience in August 2024, posting a significant increase in export volumes despite a drop in production and global trade disruptions caused by geopolitical instability. According to a Tea Board of Kenya performance report, the country expanded its market reach, particularly to non-traditional and emerging destinations, bolstering the sector’s overall performance.
Growth in Emerging Markets
In August, Kenya exported 50.65 million kilograms of tea, marking a 9% increase from 46.35 million kilograms in the same period last year. Shipments reached 56 destinations, up from 52 in August 2023, underscoring diversification efforts.
Emerging markets such as Chad and South Sudan exhibited rapid growth, while seasonal markets, including Bangladesh, Australia, Georgia, Burkina Faso, Kyrgyzstan, Mali, Mexico, Guinea, Cameroon, Togo, and Israel, played a vital role in this expansion.
Traditional markets, including Pakistan, Egypt, and the UK, remained dominant. Pakistan accounted for 40% of the total exports at 20.26 million kilograms, followed by Egypt with 8.46 million kilograms, and the UK with 4.66 million kilograms. The top 10 export destinations collectively absorbed 84% of Kenya’s total export volume.
Value-Added Tea
Value-added tea exports, a growing segment for the industry, amounted to 1.43 million kilograms in August, representing 3% of the total export volume. The UK led in this category, accounting for 42% of the shipments, followed by Somalia (21%), and Ireland and Oman (6% each). Other notable destinations included the US, Yemen, Malaysia, and South Sudan, reflecting Kenya’s focus on broadening its value chain to enhance returns.
Production Challenges
Despite the growth in exports, tea production faced significant setbacks due to unfavorable weather conditions. Total production in August declined by 6.94 million kilograms, falling from 45.57 million kilograms in August 2023 to 38.62 million kilograms.
Regions in the West and East of the Rift Valley were particularly affected. The West of Rift Block saw a decrease of 4.56 million kilograms, while the East of Rift Block experienced a drop of 2.38 million kilograms. Smallholder farmers under the Kenya Tea Development Agency (KTDA) recorded a production decline from 18.12 million kilograms in August 2023 to 16.28 million kilograms this year. Independent producers, sourcing green leaf from smallholders, also reported a decline of 2.82 million kilograms.
Impact of Geopolitical Disruptions
Compounding the challenges was global trade disruption caused by attacks on vessels in the Red Sea by Yemen-based terrorist groups. Shipping lines rerouted vessels around Africa’s Cape of Good Hope to avoid the conflict zone. While ensuring safety, this alternative route extended voyage times and raised freight costs, impacting trade to European and North African markets.
Strategic Resilience
The report highlights Kenya’s resilience in navigating these challenges. The industry’s focus on penetrating emerging markets and expanding value-added tea exports provided a buffer against production and logistical hurdles.
Kenya’s tea sector remains a vital component of the country’s economy, with export revenue playing a significant role in foreign exchange earnings. However, industry stakeholders must continue addressing vulnerabilities, including climate adaptation strategies and investment in value addition, to maintain competitiveness in the global market.
Conclusion
Kenya’s tea industry exemplifies adaptability and resilience amid multifaceted challenges. While production setbacks underscore the need for climatic resilience, the successful diversification into emerging and seasonal markets, coupled with a growing emphasis on value-added products, provides a hopeful trajectory for sustained growth in the future.
