Nairobi, Jan 21 - Adverse weather cut Kenya's tea production to 345 million kg in 2008 but improved prices pushed export earnings to a record 62 billion shillings ($779.3 million), the Tea Board of Kenya said on Wednesday.
The east African grower, the world's biggest exporter of black tea, produced a record 369 million kg in 2007 but made only 43 billion shillings from exports.
"During the first half of the year, tea growing areas experienced dry weather conditions, depressed amounts of rainfall and some incidences of frost that hit parts of the West of the Rift," a statement by the board said.
Tea production fell 35 percent in the first quarter from a year earlier and 4 percent in the second quarter.
Production by smallholder growers over the year recorded the biggest drop, down 8 percent to 210 million kg from 229 million in the previous year. Plantations' output declined by 4 percent to 134 million kg from 139 million, the board said.
Auction volumes also fell to 252 million kg last year from 281 million in 2007.
About 70 percent of Kenyan tea is sold at a weekly auction in the port city of Mombasa while the rest is sold directly to buyers overseas. The auction also serves another 11 African tea growing nations.
Kenyan exports increased by 10 percent to 383.4 million kg from 345.9 million in 2007, according to the board.
The tea was exported to 50 destinations worldwide but five countries -- Egypt, the United Kingdom, Pakistan, Afghanistan and Sudan -- purchased the bulk of the volumes.
Egypt overtook Pakistan as the leading importer of Kenyan tea. It bought 99 million kg, or 26 percent, while Pakistan was in third place with 61 million kg.
Demand from Pakistan, Afghanistan and Sudan fell in 2008 because buyers there -- who usually go for lower grades -- were put off by the rising prices at the Mombasa auction. The average auction price per kg went up to $2.33 from $1.76 in 2007.
"The slump in tea export volume to these key markets was attributed to higher auction prices that led to lower buying interest particularly within the lower-end market," the board said.
The United Arab Emirates imported 17 million kg, 25 percent more than it did in 2007. Importers there have been blending and packaging teas imported from producing nations, such as Kenya and Sri Lanka, for re-export.
Kenya is the world's third biggest black tea producer after China and India.