Agriculture Fisheries and Food AuthorityAFFA TEA DIRECTORATE TEA

Contribution to Economy Tea Contributes immensely to socio-economic development of the country: • It

Role In the Industry § § § Regulation and compliance Industry planning and development

Key Industry Statistics Total 2012 2013 639, 521 627, 938 614, 159 606, 744

Stabilized Production levels (Million Kgs) 500 432 450 399 400 Made Tea (Million Kgs)

Export Trends (Million Kgs) 600. 00 494. 35 500. 00 441. 02 Million Kgs

Increasing Export Values (billion K. sh) 120 Billion K. sh 112 114 2011 2012

Efforts to Grow Exports(2009 -2013) 25% 22% 20% 15% 10% 8% 7% 6% 5%

Improving Local Consumption (Million Kgs) 30 26 25 MILLION KGS 20 22. 7 18

Million Kgs Global Supply/Demand Trend (Million Kgs) 5, 250 5, 000 4, 750 4,

0. 00 13 -37 13 -35 13 -33 13 -31 13 -29 13 -27

Our Challenges § § § Sustained increase in production (Black CTC tea) leading to

Continued § § Declining Tea prices leading to Reduced grower earnings (30%) Rising Cost

Opportunities to Promote Tea § § § Promotion of value addition for Kenya teas,

15. Continued ……. § § § Promotion of tea based on Origin. Adopting product

Conclusion ………. § § Prepared a National Tea Policy towards improving competitiveness and sustainability

Thank You! Agriculture, Fisheries and Food Authority(AFFA) TEA DIRECTORATE

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Agriculture, Fisheries and Food Authority(AFFA) TEA DIRECTORATE TEA MARKET DEVELOPMENT IN KENYA Samuel Ogola Technical Services Manager-Tea Directorate

Contribution to Economy Tea Contributes immensely to socio-economic development of the country: • It is the leading foreign exchange earner-23% of the total foreign exchange earnings. • 4% of the GDP. • livelihood support to over 5 million Kenyans. • Contributes to Rural development. • In 2013, the tea industry earned the country Kshs. 114 Billion (Usd 1. 33 Billion) in export earnings and Kshs. 22 Billion (Usd 0. 26) in local sales.

Role In the Industry § § § Regulation and compliance Industry planning and development Industry advocacy Trade and promotion Organizational capacity and service delivery enhancement

Key Industry Statistics Total 2012 2013 639, 521 627, 938 614, 159 606, 744 595, 152 575, 103 32, 777 32, 786 39, 056 Total 187, 855 190, 717 198, 657 Smallholder 123, 385 124, 985 127, 352 64, 470 65, 732 71, 305 104 105 107 64 64 64 40 41 43 No. of Growers Smallholder Plantation Hectarage 2011 Plantation Total No. of factories Smallholder Plantation

Stabilized Production levels (Million Kgs) 500 432 450 399 400 Made Tea (Million Kgs) 350 377 369 2011 Year 2012 314 300 250 200 150 100 50 0 2009 2010 2013

Export Trends (Million Kgs) 600. 00 494. 35 500. 00 441. 02 Million Kgs 400. 00 421. 27 430. 20 2011 Year 2012 342. 48 300. 00 200. 00 100. 00 2009 2010 2013

Increasing Export Values (billion K. sh) 120 Billion K. sh 112 114 2011 2012 2013 97 100 80 109 69 60 40 2009 2010 Year

Efforts to Grow Exports(2009 -2013) 25% 22% 20% 15% 10% 8% 7% 6% 5% 1% 0% PAKISTAN -5% EGYPT -1% UK AFGHANISTAN SUDAN EMERGING TOTAL

Improving Local Consumption (Million Kgs) 30 26 25 MILLION KGS 20 22. 7 18 19 20 15 10 5 0 2009 2010 2011 2012 2013

Million Kgs Global Supply/Demand Trend (Million Kgs) 5, 250 5, 000 4, 750 4, 500 4, 250 4, 000 3, 750 3, 500 3, 250 3, 000 2, 750 2, 500 2, 250 2, 000 1, 750 1, 500 1, 250 1, 000 750 500 250 2004 2005 2006 2007 Supply 2008 2009 Demand 2010 2011 2012 2013

0. 00 13 -37 13 -35 13 -33 13 -31 13 -29 13 -27 13 -25 13 -23 13 -21 13 -19 13 -17 13 -15 13 -13 13 -11 13 -9 13 -7 13 -5 13 -3 13 -1 Auction No. 14 -30 14 -28 14 -26 14 -24 14 -22 14 -20 14 -18 14 -16 14 -14 14 -12 14 -10 14 -8 14 -6 14 -4 14 -2 13 -51 13 -49 13 -47 13 -45 13 -43 13 -41 13 -39 Price (USD/Kgof Made Tea) Declining Tea Auction Prices (2013 -2014 -To Date) 3. 50 3. 00 2. 50 2. 00 1. 50 1. 00 0. 50

Our Challenges § § § Sustained increase in production (Black CTC tea) leading to global oversupply. Global supply is growing at higher rate than demand by about 3% annually. Slow adaptation to product and Market diversification e. g “Orthodox , Specialty teas etc. . Origin Branding Low consumption patterns in Africa.

Continued § § Declining Tea prices leading to Reduced grower earnings (30%) Rising Cost of Production (COP); Many private standards and diverse regulatory requirements by respective importing countries. Low innovation along the value chain

Opportunities to Promote Tea § § § Promotion of value addition for Kenya teas, a target of 20% has been projected: Increased populations in Africa and Asia Increased awareness of health benefits of tea in Europe and America. Increased income levels and expanding middle class globally. Low consumption in Africa , currently Africa has a population of 1. 1 Billion with

15. Continued ……. § § § Promotion of tea based on Origin. Adopting product diversification and innovation e. g Purple tea, Orthodox tea, White tea e. t. c. Adoption of cottage Industry models to promote specialty and niche teas segments.

Conclusion ………. § § Prepared a National Tea Policy towards improving competitiveness and sustainability of the Industry. Developed Kenya Climate Change Strategy for the Tea Industry in collaboration with FAO. Automation of the tea Auction with a view to improving transparency and enlarge competition; Commissioned a study on Price

Thank You! Agriculture, Fisheries and Food Authority(AFFA) TEA DIRECTORATE