COIMBATORE: This could well herald a different brew in the global export teacup. Faced with a severe drought, drop in production and a possible fall in exports, Kenya is now turning to India for tea. Kenya is purchasing tea from the south for blending in the past two weeks, according to industry players and officials here.

“They have become very active in the market. Kenya has started procuring tea from India for blending it with their teas to cater to their traditional export markets,” industry officials said. Though the exact quantum of Kenyan purchases is not known, industry players said the exporters would be looking at blending about 25% of their export consignments with Indian tea to offset the loss in production.

While a few exporters operating out of Mombasa have already purchased tea, others, too, have evinced keen interest in Indian tea, industry sources said. The exporters are buying well made black CTC teas with good appearance, they added.
Kenyan buyers, who were buying teas at Rs 46 per kg, are now willing to offer up to Rs 55 per kg, sources said. Industry players likened the situation to the one that prevailed during ’98-99, when Kenya bought large quantities of Indian tea to tide over a fall in production due to drought. Kenya exported most of its estimated production of about 330m kg last year with Pakistan accounting for a bulk of the exports.

The Kenyan interest coupled with purchases from Pakistan is driving prices up in auction centres, such as Coonoor and Coimbatore. On an average, prices that remained subdued for most part of last year have started moving up.

In Coonoor, medium and plainer CTC grades were up by Rs 6 per kg in the past auction while prices went up by Rs 2-4 per kg in Coimbatore. Medium grade teas that were ruling at Rs 40-50 per kg have jumped to around Rs 55 per kg in recent auctions.

“There is a strong possibility of good and good medium grades going up to Rs 65-80 per kg,” an industry player said. That the prices are being driven largely by export demand is evident from the increase in export volumes in auctions. While on an average only 25-30% of the volume on offer at auctions went for exports, more than 60% is being exported now.

Though the scope for improving exports to traditional Kenyan markets is good, India cannot capture a substantial share in these markets, industry players said. “Our teas cannot replace Kenyan teas in markets like Pakistan as our production costs are still high. Also, Kenya has entered into mutual trade agreements for marketing their teas. It will be difficult for India to penetrate deep in these markets,” they added.

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