A weaker shilling, more significant volumes, and higher beverage prices all contributed to an Sh2 billion gain in tea export revenue last year.
According to the Tea Board of Kenya, the earnings overcame the global economic shocks brought on by the Russia-Ukraine war last year to increase to Sh138 billion from Sh136 billion (TBK).
The shilling’s depreciation against the dollar in the year leading up to December 2022, when it closed at Sh123.4, contributed significantly to higher earnings.
Compared to the previous year, when it lost 7.24 per cent to reach Sh109.1 to the US dollar, this depreciation was greater. Exporters that sell their goods in hard currencies, such as the US dollar, benefit from shilling’s decline in value. “Export volumes in 2022 stood at 410.2 million kilogrammes of made tea against 388 million kgs in 2021,” said the TBK.
The value of the tea sold to the North African State fell from Sh23 billion in 2021 to Sh20 billion last year in Egypt, which suffered a severe reduction in volumes of 34%.
The third-largest consumer of the beverage in Kenya, the United Kingdom, saw a volume loss of 21% and a minor decline in price from Sh10.6 billion to Sh10.8 billion in 2017.
Nonetheless, 55 per cent of Kenya’s total tea exports to the global market come from Pakistan and Egypt.