Kenya’s Tea Exports Up by 13% in 2021 with a Positive Outlook for 2022

Bulk Black Tea

Kenya

Market & Price Trends

Published Feb 21, 2022

In 2021, Kenya recorded a 13% YoY increase in export value and a 7.16% increase in the export volume of tea. The higher export value was driven by stable average auction prices and the strong dollar against the domestic currency. However, during the last week of January, the tea prices hit a four-year high, recording a WoW rise of 3.77%. The price increase is driven by the growing demand for black tea in the global market, especially with Pakistan kick-starting its sourcing campaign. Outlook for the Kenyan tea industry in 2022 is positive as it continues to expand its market, offer competitive prices, and a flavourful pot of tea to many countries in the world.

Kenya is one of the leading exporters of black tea to the world. The country exports its tea to many countries, many of which are leading tea-consuming countries, including Pakistan, the UK, Sudan, Egypt, Russia, and Iran. As per the East African Tea Trade Association (EATTA), in 2021, the top 10 markets for tea exports accounted for 89% of the total volume shipped out of the country. The top 10 buyers of Kenya’s tea, except the UK, registered an increase in volumes of imported tea from the country making it a bumper year for Kenya’s tea exports. In 2021, Kenya recorded a 13% YoY increase in export value, reaching USD 1.20 billion. Even the export volumes recorded a YoY increase of 7.16% compared to the previous year, despite a fall in tea exports relative to 2020.

Even though the overall tea production during 2021 fell, the average auction price for Kenyan tea remained unchanged at USD 2.02 during the first 10 months of 2021, allowing Kenyan tea to remain competitive in the global market. Furthermore, the strong dollar against the shilling (Kenya’s domestic currency) increased the export earnings for farmers. A change in price trend was seen in the Mombasa auction held in the last week of January, as tea prices hit a four-year high. According to EATTA, one kg of tea averaged USD 2.65, recording a WoW increase of 3.77%. The price increase was driven by the growing demand for black tea in the global market, especially among the leading tea-consuming countries.

Pakistan has emerged as one of the strongest countries at the Mombasa tea auction and kick-started its purchase campaign for 2022. According to the Tea Directorate of Kenya, Pakistan was the leading market for Kenyan tea even in 2021, owning a share of 37.1% of the total Kenyan tea exports. The volume of tea exported to Pakistan recorded a YoY increase of 8.35% from 428 million kg in 2020 to 467 million kg in 2021. The last few years have also shown higher interest in Kenyan tea in emerging markets like Ireland, Finland, the USA, and Ukraine.

Kenya’s tea industry is pushing encouraging sales of their local tea to more global markets globally to increase their export volumes. The Kenya Tea Development Agency (KTDA) is confident that the tea prices will improve even more in the coming year alongside the tea exports. In addition to this, KTDA is also planning to promote local consumption of Kenyan tea as the domestic consumption volume has been low in the last few months. During the first 10 months of 2021, the local consumption stood at 31.03 million kg, down from 33.69 million kg during the same period in 2020. If all goes well, the outlook for Kenya’s tea industry in 2022 is positive, as it continues to offer a flavourful pot of tea at competitive prices to many countries in the world.