NAIROBI // In the cool, fertile highlands of western Kenya, tea plantations dot the landscape, their leafy green bushes stretching to the horizon. Kenyan tea pickers, hunched over with white sacks slung across their backs, methodically graze up and down the endless rows of tea plants ensuring that they only pluck the top two leaves and a bud from each stem, the most flavourful part of the bush.
British colonialists first planted tea here a century ago in an experiment that would turn out to become one of the biggest profit making enterprises for this east African country. Currently, Kenya produces about 350 million kilograms of tea per year and is the fourth biggest exporter of the beverage behind China, India and Sri Lanka. Tea makes up 30 per cent of the country's export earnings and ranks with coffee and cut flowers as Kenya's largest foreign exchange earners.
Additionally, the tea industry provides hundreds of thousands of jobs for Kenyans from growers and pickers to packers and shippers. Much of Kenya's tea is exported to the UK, the Middle East and Pakistan, where consumers enjoy the strong taste of the dark black tea and its low price. But there is trouble brewing in the Kenyan tea industry. A low rainfall is expected to produce a less than bumper harvest this year. The decrease in production will likely drive prices up. Consumers, already hit hard by the global financial crisis, may think twice about having a second cup of tea in the morning.
The failed rainy season has created a drought in Kenya that has caused food shortages and also disrupted tea production, which is almost entirely rain fed. "The drought is too prolonged," said Sicily Kariuki, managing director of the Tea Board of Kenya. "The weathermen tell us we are not likely to have a good rain. Some pockets of tea growers are likely to suffer." The Tea Board predicted that production will drop by at least five per cent this year to 328m kg down from 345m kg last year. Production was already down 12 per cent in the first two months of this year. Analysts fear that this will cause prices to climb.
"If the shortfall turns out to be as deep as expected, then prices will go through the roof," Kaison Chang, an economist with the United Nations Food and Agricultural Organization's tea division, told the BBC. Consumers are already starting to feel the pinch of higher tea prices. In 2007, Kenyan tea sold for an average of US$1.76 (Dh6.5) per kg. By the end of 2008, tea was above $2 per kg. Prices have been steadily rising this year. Last week's tea auction in the port town of Mombasa, where 70 per cent of Kenyan tea is sold, saw an average price of $2.40, according to Africa Tea Brokers Ltd, the founding broker of the Mombasa auctions.
"Definitely reduced production affects the price," said David Mwashumbe, an auctioneer with African Tea Brokers Ltd. "Good tea is getting a high price." As the price of tea goes up, countries that are hit hard by the financial crisis are buying less tea. As a result, a lot of tea is going unsold, Mr Mwashumbe said. "We are seeing a selective buying from the buyer countries," he said. "A lot of countries have cash flow problems because of the financial crisis. They are only purchasing the teas that they can use immediately whereas before they would buy tea to keep on stock."
Tea factories are taking the hit from unsold lots and are buying less from growers. This is expected to eventually trickle down to the three million Kenyans who depend on tea for their livelihoods. "The impact has not been felt yet, but we are planning for it," said Charles Kimathi, a spokesman for the Kenya Tea Development Agency, which represents 500,000 small-scale tea growers. "If it indeed happens, there would be fewer purchases from small-scale farmers and it would be a serious impact."
Small-scale farmers account for 62 per cent of all the tea produced in Kenya. A handful of multinational companies, such as Unilever and Finlays, grow the rest of Kenya's tea. A lot of Kenya's exported tea is blended with tea from other countries to make a bolder, more flavourful brew. The Tea Board, a government agency, is looking to develop new markets for its tea in the Middle East, West Africa and China, Mrs Kariuki said. As long as there is a market for Kenyan tea, the rise in price will make up for the shortfall in production, she said.
"We will just have to live with depressed production," she said. "Overall, I'm confident we will be able to find a market for the tea we produce." mbrown@thenational.ae
