Kenya tea exports hurting from Egypt unrest

Thursday, 1 August 2013 02:09 -     - {{hitsCtrl.values.hits}}

MOMBASA, Kenya (Reuters): Kenya’s tea exports to Egypt have fallen in the past three weeks, hurt as turmoil in the biggest market for the top grade Kenyan product hit sales, traders said.Egypt has been convulsed by protests and violence since the army deposed Mohamed Mursi on July 3, following huge rallies against the Islamist president. The Muslim fasting month of Ramadan, which began earlier in July, had also dampened demand. During Ramadan, Muslims do not eat or drink during daylight hours. Kenya is the world’s leading exporter of black tea, a major source of revenues, which earned 112 billion Kenyan shillings ($1.28 billion) last year. “In a normal month, our company alone exports between 1.5 and 2 million kgs of tea to Egypt, but in the last three weeks, we exported nothing, and received no orders from Egypt,” Kevin Dago, a tea manager at exporting firm Juja in the Kenyan port city of Mombasa, told Reuters. Speaking from the company’s warehouse surrounded by piles of 60 kg bundles of black tea in khaki bags awaiting export, he said they had now turned attention to other export markets such as Pakistan, Turkey and Afghanistan. The Tea Board of Kenya had earlier projected tea earnings would hit 120 billion shillings this year, but that forecast was made before the eruption of unrest in Egypt. In January to May, Kenya sold 204 million kgs of tea to 58 countries, worth 52.5 billion shillings, and of that amount Egypt bought 43 million kg, worth 10.4 billion shillings, Tea Board of Kenya figures showed. Tea traders in the port city Mombasa, which hosts a weekly tea auction, said the average price at auction fell by $0.25 to $2.60 per kg in the past three weeks as they halted buying stock for fear that it would not sell. “We have experienced a major decline in quantity of tea being bought from Kenya, with Egypt, our main market, playing a key role in the decline,” Brian Ngwiri, marketing manager at East African Tea Trade Association (EATTA), told Reuters. He said sales had also slowed since the start of Ramadan, but could climb again as the fasting period draws to a close. “It appears already the market is showing signs of looking up, and might be back to normal after the fasting,” he said. A similar picture of depressed sales to Egypt also emerged in early 2011 when President Hosni Mubarak was toppled in the wake of mass protests and violence.