Nairobi, September 29, 2008 - Kenya's tea earnings could hit a record 50 billion shillings in 2008, compared with 43 billion last year, despite lower production, the Tea Board of Kenya said on Monday.
Kenya, the world's leading exporter of black tea, expects production this year to drop to 335 million kg, compared with 369 million produced last year.
"With improved prices and weakening of the shilling against the U.S. dollar, total export earnings for tea are expected to hit a record high of over 50 billion shillings by the end of the year," the industry regulator said in a statement.
The Kenya shilling has weakened to an eight-month low against the dollar this month as the turmoil in international financial markets extended into local markets.
The tea board said output in the first eight months of 2008 dropped 16 percent to 206 million kg compared with the same period last year on low rainfall at the start of the year.
"Despite improved production in August, cumulative production for January to August 2008 registered a drop of 16 percent to record 206 million kg compared to 244 million kg for the same period in 2007," the statement said.
"Lower production for the period to date was due to depressed rainfall experienced in most parts of the country during the first half of 2008."
Kenya's coldest season ended in August and the board said it expected September's output would improved.
A total 161 million kg were offered for sale over the eight months at an auction held weekly, compared with 202 million kg during a similar period in 2007.
The average price for a kilogramme improved to $2.42 from $1.72 last year. In August alone, the average price rose by $1 per kg to $2.75.
"This is the highest average price ever recorded over the last two and a half decades," the statement said of the August figure.