Kenya says tea export volumes unaffected by Egypt unrest

MOMBASA: Kenya's tea market regulator said political instability in Egypt, one of the biggest buyers of Kenyan tea, has not affected sale volumes due to interest from other markets and better-than-expected weather.

Egypt, which typically accounts for about 20 percent of Kenya's total tea exports, has been convulsed by months of political protests and violence..

Tea is a major source of revenue for Kenya, the world's leading exporter, bringing in 112 billion Kenyan shillings ($1.3 billion) last year.

Kenyan traders have warned that tea exports to Egypt have slumped, but the Tea Board of Kenya said weather and stronger interest from alternative markets appeared to have compensated for poorer Egypt trade.

"Our monthly analysis does not show any major variations. The tea that went to the auction last week and the previous week was bought by other actors in the market," Zakayo Magara, Tea Board of Kenya's chief executive, wrote in an e-mailed statement.

Zakayo said the board needed more time to analyse the long-term effect of the Egypt unrest on Kenya's tea exports.

"We will be looking at how the situation pans out in the next six months before the close of the year, by which time it should be possible to make a definite and accurate conclusion on the situation and impact," he said.

Traders who export to Egypt said they have sought alternative markets as they have waited for Egyptian traders to resume buying.

"We are now focused on Pakistan and Afghanistan, which consume a lot of our tea as well. We also have a few orders from Egypt, which is an improvement from last week. We hope the end of Ramadan improves the markets further," said Kevin Dago, a tea exporter who ships tea to Egypt and other Arab countries.

The Muslim fasting month of Ramadan, which began earlier in July, has also dampened demand. During Ramadan, Muslims do not eat or drink during daylight hours.

The tea board said Pakistan was Kenya's leading export destination in 2012 ahead of Egypt, which was the biggest buyer of Kenyan tea in 2011.