KENYA - A glut of black tea in Kenya is causing a drop in profits for the growers, a drop in revenue for the country, and the possibility that smallholders will uproot their tea bushes in favor for higher earning crops. Small-scale farmers who three years ago made good profits are now earning 40% less per kilo. With flowers and other horticultural products, tea is one of Kenya’s major export earners but tea prices have been under pressure globally and Kenya’s top grade teas which used to fetch $3.78-$4.38 per kg in 2012, are now selling at $2.10-$3.40 in the Mombasa auctions. Smallholders produce two thirds of Kenya’s tea but some have already switched to growing vegetables or to farming cattle.
Wilson Tuwei, chairman of cooperative Siret Tea Company, “We are telling our members to diversify.” Last month, agriculture minister Felix Koskei urged farmers to keep growing tea, telling them that the government is seeking new buyers in Eastern Europe and the Middle East, and has plans to set up a price stabilization fund, which would involve the state buying up some of Kenya’s tea when prices are low and selling it onto the global market once prices stabilize, to cushion farmers against fluctuations.