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Shortfall in Kenya may boost tea prices: Analysts
Tea prices might go for a record high following a historical drop in Kenya's production, reduced supplies at the Mombassa tea auction and a rise in international market prices, analysts said.
Kenya tea is internationally used for blending with other teas and is always in high demand.
According to the Tea Board of Kenya, the country's tea has suffered its steepest drop in production, falling 35 per cent for the first quarter of 2008, defying the board's prediction in February that production would rise with the onset of the long rains.
In 2007 agricultural export earnings were a record $1,507 million, a 16.6 per cent growth, owing to the increased export earnings from these two crops.
Tea, the main agricultural export that accounted for over two thirds of agricultural exports, exceeded the $1 billion mark.
The report indicates a lower volume of exports from Kenya due to a decline in tea production is an important contributory factor in increasing international tea prices.
The demand for tea from oil-producing Middle East countries, Russia and East Europe is another significant factor in the increase in tea prices.
Tea production for the first quarter of 2008 dropped from the 108 million kg recorded in January-March 2007 to stand at 70 million kg. During the period, the lowest output of 16.9 million kg was recorded in February and 29.7 million kg recorded in January.
Tea prices might go for a record high following a historical drop in Kenya's production, reduced supplies at the Mombassa tea auction and a rise in international market prices, analysts said.
Kenya tea is internationally used for blending with other teas and is always in high demand.
According to the Tea Board of Kenya, the country's tea has suffered its steepest drop in production, falling 35 per cent for the first quarter of 2008, defying the board's prediction in February that production would rise with the onset of the long rains.
In 2007 agricultural export earnings were a record $1,507 million, a 16.6 per cent growth, owing to the increased export earnings from these two crops.
Tea, the main agricultural export that accounted for over two thirds of agricultural exports, exceeded the $1 billion mark.
The report indicates a lower volume of exports from Kenya due to a decline in tea production is an important contributory factor in increasing international tea prices.
The demand for tea from oil-producing Middle East countries, Russia and East Europe is another significant factor in the increase in tea prices.
Tea production for the first quarter of 2008 dropped from the 108 million kg recorded in January-March 2007 to stand at 70 million kg. During the period, the lowest output of 16.9 million kg was recorded in February and 29.7 million kg recorded in January.
