James Anyanzwa And Reuters
24 April 2008
Nairobi — Stakeholders in the tea industry have been urged to invest more in value added products to protect local farmers from falling incomes in global markets.
Agriculture Assistant minister, Mr Japheth Kareke, said competition had heightened in the international market, due to excess supply of tea and entry of new players such as Vietnam and Malawi.
This, he said, had made Kenyan tea uncompetitive in these markets.
"Global prices of tea are declining while domestic prices are escalating due to the high cost of production. There is therefore a great need to help our farmers through value additions," said Kareke.
He was speaking at the launch of the Kenya Tea Packers (Ketepa)'s new line of beverage, 'Safari Ice Tea.'
Kereke said 95 per cent of tea produced in Kenya is exported in bulk with Ketepa exporting a paltry five per cent of its value added tea. He underscored the need to increase the domestic consumption of tea.
The tea industry makes significant contribution to Kenya's economy. Data indicates that tea exports earned the country Sh43 billion last year, placing it third after horticulture and tourism. In addition the industry employs more than three million people.
Kereke said his ministry would strive to provide a conducive environment to boost competitiveness and improved earnings.
Meanwhile tea prices fell at this week's auction after the onset of rain eased fears that insufficient rainfall would cut production.
More than 100,000 packages were offered for sale at the auction with 20,899 going unsold, according to the Africa Tea Brokers.
"It has started raining. Buyers think there won't be a shortage now," said Mr Peter Kimanga, chairman of the tea buyers association.
The Government had warned that the long rains, between March and May, could be less than normal, raising fears of reduced production.
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