Zimbabwe's Tea And Coffee Cultivation On The Rebound

Tea and coffee cultivation are experiencing a revival in Zimbabwe's Eastern Highlands.

Most farmers have been taking up tobacco, but this year’s crop has been fetching lower prices. In the Eastern Highlands region near the border with Mozambique, coffee and tea growing is becoming profitable once again.

  “Tea production for the six-month period to March 31 improved by 6percent to 1851 tons,” said Paul Spear, the chief executive of horticultural concern Ariston Holdings.

The company said export prices were strong and favourable for its operations. Any company or business operation that generates forex in Zimbabwe is considered better off at a time the local currency has continued to sag. For Ariston, export sales volumes for tea during the review period strengthened by as much as 18percent, giving the company a much needed financial boost. Prices were also massively stronger too. “Average export prices improved by 13 percent,” said Spear.

Coffee is another crop that is starting to recover in the Eastern Highlands area. Farmers in the area have also received a fresh lease of life after Nespresso launched a coffee product from Zimbabwe last month, putting the country’s prospects and advantages back on the global coffee market.

But the Chimanimani and Chipinge areas, where the crops are grown the most, were recently ravaged by Cyclone Idai and farm and irrigation equipment was destroyed. This has not been a deterrent with Ariston, which is also listed on the ZSE currently processing a $1.5million (R22.15m) insurance claim cover for the tea growing infrastructure that was destroyed.

Zimbabwe has a long history of coffee production and was once one of the producers of Africa’s most sought after coffee varieties. Coffee production from Zimbabwe peaked in the late 1980s, but dropped significantly in the early 2000s because of economic hardship and climate shocks as well as land grabs in 2000.

Full article...

Kenya tea output for 2012 at 360 million kgs

The Tea Board of Kenya says the country's output for 2012 is 360 million kg, 5% lower than the 2011 yield because of frost and late rains.

January to August exports dropped 6% to 214 million kg at an average price of $3.15 per kg, compared to $3 in the same period in 2011.

full article...Reuters

Could drought threaten South Africa's rooibos tea?

by Pumza Fihlani

The world has developed a taste for South Africa's rooibos tea in recent years, mainly because of its perceived health benefits.

Annual exports have quadrupled since 1999 to 8,000 tonnes, proving a rare lifeline for residents of the harsh Suid Bokkeveld region where it grows. But the tea only grows in this small area and erratic weather patterns - blamed by some on climate change - mean the plant and the new industry are now under threat.

Small-scale farmer Jan Fryer, 53, has been growing rooibos on a communal farm for the past seven years. Despite growing tea for more than 20 years, Mr Fryer says the new climate rhythm has made him something of a novice in the field.

"The temperatures are definitely getting hotter and because of this is it more difficult for the rooibos plant to grow," he says. "The soil becomes too hot and the root of the plant burns and dies making the seedlings wilt and die before they even get a chance to become proper plants. We've had to change how we plant because of this."

The Suid Bokkeveld has always been a tough place to live – temperatures drop to 0C during winter and rise to a scorching 48C in the height of summer. But farmers say rooibos has become increasingly difficult to work with in recent years. As a result the planting season has changed from June-July to November, says Mr Fryer.

The industry is labour-intensive and provides about 4,500 jobs with a lot of work done by hand mainly by non- or semi-skilled workers.

The main foreign markets for the herbal tea are the UK, Germany, Netherlands, the US and Japan, according to the Department of Agriculture.

In 2000, about 4,500 tonnes of the leaves were sold abroad, more than twice the amount for 1999 and exports have now doubled again.

Rooibos is particularly vulnerable to changes in the weather as it only grows in about 20,000km sq of the Suid Bokkeveld due to the region's biodiversity. The herbal plant needs specific bacteria and fungi to be present in the soil as well as certain bees and wasps which are only found here.

There are two types of the plant - cultivated rooibos and wild rooibos. Wild rooibos has flourished in the region for many centuries and only recently became a commercial product. With a stronger taste, this more exotic tea fetches a higher price on the local and international markets.

But in 2003 the area was hit by a severe drought, which lasted for three years. More than half the cultivated rooibos was destroyed; it was the wild plants which helped sustain the industry.

"During the drought it became important for us to teach farmers to shift their focus from farming cultivated rooibos to wild rooibos, which proved more resilient to drought and changing conditions," says Noel Oettle of Environmental Monitoring Group (EMG).

Farmers have also moved from planting rooibos seedlings to planting seeds directly into the soil. While they take longer to germinate, seeds are more resilient and stand a better chance of yielding any kind of harvest, experts have told farmers here.

Today environmentalists warn that a similar drought is on the cards in the next few years. They say the future of this herbal brew is squarely in the hands of the farmers.


BBC

Tea research key to a growing industry

by Julie Frederikse

Pelly Malebe's research on helping plants withstand drought is personal as well as scientific. She grew up in South Africa's drought-prone northern province of Limpopo, where crop failures are frequent.

If the affected crop is food for family consumption, the result can be hunger. If it is a crop for trade or export, the loss of earnings can also mean too little food on the family table, as well as threatening commercial farmers, both large and small.

As a doctoral student at the University of Pretoria, Malebe is studying the drought-survival mechanisms of tea plants under stress – and has identified a DNA marker for those plants more able to withstand drought. "This can be used to identify suitable drought-tolerant cultivars to benefit the commercial tea industry," she says.

In effect, Malebe has found a shortcut that suggests that a particular tea plant will tolerate drought conditions, without having to wait to see if and how the plant grows. Happily, the drought-tolerant plants can adapt to excess moisture, which means they can survive rainy weather as well.

Malebe's research is supported by RISE, the Regional Initiative in Science and Education, aimed at building capacity for science research and teaching in African universities. Funded by the Carnegie Corporation of New York, a charitable foundation, RISE works through a series of thematic networks, including Sabina, which stands for the Southern African Biochemistry and Informatics for Natural Products Network.

Sabina members include the Tea Research Foundation of Central Africa and the universities of Malawi, Namibia and Dar es Salaam [Tanzania], as well as South Africa's universities of the Witwatersrand and Pretoria. South Africa's Council for Scientific and Industrial Research also participates.

Biochemistry Professor Zeno Apostolides, founder of the University of Pretoria's Tea Research Laboratory, is a Sabina faculty advisor supervising three PhD students, including Malebe and fellow researcher Nicholas Mphangwe.

Before he was accepted into the Sabina programme, Mphangwe had been working as a plant breeder for the Tea Research Foundation in his home country of Malawi, where tea provides about 30 percent of the country's foreign exchange and about five percent of the world's tea crop.

Since one of Rise's goals is to enhance scientific skills among scientists in mid-career, Mphangwe was able to take leave from his job to become part of the Sabina programme. In the lab, he is probing genetic markers to identify cultivars more adaptable to African growing conditions and more resistant to drought, insects, diseases and low temperatures.

"In Malawi, Zimbabwe and Zambia, the main work on tea is being carried out at research stations, so we tea breeders are still continuing to go into the field and visually assess promising cultivars," Mphangwe said. "I hope eventually to develop cultivars with good off-season growth, so as to extend the growing season."

Once he earns his PhD, Mphangwe plans to return to Malawi to work with the Tea Research Foundation of Central Africa. This non-profit organisation is funded by Malawi and Zimbabwe tea growers to improve technologies. Some of the tea cultivars it has developed are also grown in Tanzania, Kenya and Uganda, as well as outside Africa.

Camellia sinensis, the biological name for the plant that produces black and green tea, is grown in some 50 countries and is the world's most widely drunk beverage after water. Apostolides says tea production in southern African is growing at about 20 percent per year, so the region could challenge India for first place in tea production by about 2020. "India produces 900,000 tons of tea per year," he says, "while Sri Lanka and Kenya, which are always competing for second place, produce 300,000 tons each, and all the African countries combined produce about 400,000 tons, so as a region we are in second place."

The Tea Board of Kenya reported that Kenya's tea exports last year overtook horticulture – flower production – to become the country's largest foreign exchange earner. Uganda, Malawi and South Africa are Africa's other leaders in tea production.

Pelly Malebe's work has included finding a feasible way to send cultivars to research labs. "Developing countries lack skills for the isolation of genetic material," she says. "What is needed is a simple leaf-drying method so that the tea leaves can be transported to laboratories where genetic material can be extracted and usable genomic DNA can be isolated and stored."

After testing various methods of drying tea plants – blanching, pressing, freeze drying and placing it in bags with silica gel – she determined that using silica gel in sealable plastic bags gave the best results. That encouraging finding could point the way to a simple methodology for obtaining and storing genetic material, applicable to other products and places.

Before publishing her research on DNA markers for drought resistance, Malebe conferred with Apostolides. The scientists had to choose whether or not to patent the cultivars. She and her advisor decided that she would write up the research results without claiming them as intellectual property. So this breakthrough from Africa will soon become free knowledge to the international scientific community.

allafrica.com

Climate change makes it hard for rooibos tea bush

by Kristin Palitza


South Africa’s rooibos tea has become a popular drink all around the globe. But prices of the herbal brew could shoot up within the next decade, as the rooibos plant can only grow in one small region in the world – which is severely affected by climate change.

Pieter Koopman stoops down to inspect a young rooibos bush. The farmer, who owns an 850ha tea farm in the Suid Bokkeveld, in Western Cape, is greatly concerned about the upcoming harvesting season. Droughts and erratic rainfall have destroyed more than half of his crop over the past decade. But he has hopes that this year will be a better one.

“The last 10 years have been hard. We had to learn to adapt to new weather conditions, and we still do. We can’t sit back and wait,” says Koopman. Vital rain, which usually occurs in the South African winter between May and August, the traditional rooibos planting season, has not been falling. “All our seedlings died. We made losses every season,” the farmer says.


Rooibos tea only grows in the harsh Suid Bokkeveld area of the Western Cape. Now even this area is being threatened by drought and erratic rainfall.

In response, Koopman and other farmers in the area started to change their farming techniques. They planted windbreaks with indigenous plants to stop soil erosion, built water catchments and, perhaps most importantly, started to plant seeds instead of seedlings.

“Seeds take longer to grow, but are less sensitive to a lack of rain,” Koopman explains. “It was a tough lesson to learn.”

If Koopman and his peers manage to successfully adapt to climate change, rooibos lovers the world over can breathe a sigh of relief: because the entire global supply of the red bush tea comes from a single production area, the South African Suid Bokkeveld, which measures just 20000km².

Attempts to cultivate it outside of this region have failed, as the plant needs the harsh conditions of the region, where temperatures drop to 0°C during winter and rise to a blistering 48°C at the height of summer.

The farmers’ concerns are justified. Experts predict that agriculture in sub-Saharan Africa will be severely affected by climate change. By 2050, changes in weather patterns will cause average rice, wheat and maize yields to decline by up to 14% , 22% and 5%, respectively, according to the Washington DC-based International Food Policy Research Institute.

“That’s why the long-term prosperity of rooibos farmers will depend greatly upon their ability to change their farming practices to these new weather conditions,” says Noel Oettle, rural programme manager of the Environmental Monitoring Group (EMG), a nongovernmental organisation helping rooibos farmers increase their resilience to climate change through natural resource management, monitoring weather patterns, soil and water conservation as well as promoting agricultural biodiversity.

“Only if farmers include in their decision making the likelihood of extreme weather events and focus on sustainable production, can the rest of us continue to enjoy rooibos tea,” reckons Oettle.

Rooibos tea has become a popular drink around the globe not only because of its sweetish nutty taste, but due to its many health benefits. Caffeine-free and rich in antioxidants, rooibos contains a wealth of minerals, such as zinc, copper, calcium, magnesium and potassium and is known to act as a digestive aid as well as an anti-carcinogenic, anti-inflammatory and anti-viral.

According to the Department of Agriculture, the country exports about eight tons of rooibos tea per year to key foreign markets, such as Germany, Netherlands, the UK, Japan and the US, but also to Chile, Poland and Russia.

Rooibos tea farming remains a small industry, with about 300 farmers, most of them smallholders who employ a handful of workers full-time, plus seasonal workers during harvest. The Suid-Bokkeveld is a poverty-stricken area that has seen slow economic improvement since rooibos became popular in foreign countries.

“Climate change is likely to have a negative impact on those exports because of the plant’s geographic limitation, but also because there exists only one species of rooibos.

“If it gets wiped out, that’s it,” says rooibos expert Dr Rhoda Malgas, a researcher at the department of conservation at the University of Stellenbosch. By comparison, there are 25 species of Honeybush, another South African herbal tea of the fynbos variety.

One option to save South Africa’s rooibos plant is to conserve the wild rooibos plant, Malgas believes, which has been growing naturally in the Suid Bokkeveld for centuries. Wild rooibos is hardier and more heat resistant than its cultivated cousin, with a more elaborate root system that can survive less rainfall.

“It would be wise to start building seed banks. If you conserve wild rooibos, you can conserve the genetic material from which the cultivated rooibos tea is derived,” the scientist suggests.

Some rooibos farmers have already caught on to the idea. Laurenz Dworkin, who owns a 100ha tea field in the Suid Bokkeveld, says he has considered harvesting wild Rooibos in addition to the cultivated variety.

He also plans to collect its seeds to be able to protect his farm from the effects of climate change. “Wild rooibos has not become a commercially viable product yet, but it has potential,” he says.

But Dworkin is concerned that the trend to commercialise the wild variety will ultimately do more harm than good. Because it grows more slowly, wild rooibos cannot be harvested on the same scale as cultivated rooibos – it can only be picked every two years. Yet, farmers, desperate for quick profits, might harvest the plant annually all the same, and ultimately destroy it.

“We desperately need responsible farmers who think long term and don’t kill the plants for fast profits,” says Dworkin. “Instead, we should work on the assumption that rooibos prices will keep going up. The plant might become more valuable because yields will decrease due to changing weather patterns.”

Although EMG supports the farmers, it remains their own decision what farming practices they apply. Farmers are often reluctant to take the risk to try new approaches and rooibos farming remains a small industry, without large amounts of research money behind it.

If Dworkin is right, a hot cup of rooibos tea might soon cost consumers a premium.

The New Age

Tea cultivation affected by changing climate in Malawi

Changing weather patterns are undermining the ability of smallholder producers in Malawi's southern region to grow tea, a crop that usually brings in 70 percent of their income, according to local farmers interviewed for a recent Fairtrade study.

The soils, climatic conditions and sloping ground of the area around the impressive Mount Mulanje, where most of Malawi's tea is grown, are well suited to the crop that supports up to 10,000 smallholder farmers.

However, data collected by the United Nations and a number of international anti-poverty groups, including Action Aid and Fairtrade, show that temperatures in Malawi are rising steadily, and more frequent droughts and floods are affecting more people.

In 2006 Action Aid found that from 1970 to 2006 Malawi experienced 40 weather-related disasters, with 16 occurring after 1990.

Before 2001 only nine Malawian districts were classified as flood-prone, but 16 were affected in 2001 and a further 14 in 2002. By the end of January 2003 there was localised flooding in 22 districts, causing eight deaths and damaging homes and crops.

Using statistics from the UN Development Programme, the University of Greenwich deduced in 2010 that the mean temperature in Malawi could be expected to rise by between 0 .5 and 1.8 degrees Celsius by the 2030s.

This would reduce the viability of tea at the lower levels of its current altitudinal range within the next few decades, according to Fairtrade. The organization will be presenting case studies about how a changing climate is affecting small-scale farmers across Africa at the UN climate change conference in Durban, South Africa, in late November 2011.

"In this part of Malawi we are meant to have rains from November to September, and that is very good for growing tea. Unfortunately though, the annual rainy seasons have been reducing in length, and the periods of drought have been increasing,” said Austin Changazi, a manager at the Sukambizi Association Trust, a cooperative of smallholder farmers with 6,300 members.

"This means the plants are not producing as much leaf as they should, and on average our members' crop yield is down by about 15 percent," he said.

The changing weather has also brought an influx of disease and pests, the worst of which is an insect called Helopeltis, a mosquito-like insect.

"The adult lays its eggs on the tea plant and when they hatch they feed on the young tea leaves and tender stems, which dries them out and makes them useless. We probably lose between five and 10 percent of our crop to pests [every year], and the longer the drought period goes on the worse the problem gets," Changazi said.

The simultaneous occurrence of these factors is causing tea plants to die in alarmingly high numbers. "On average, a smallholder farmer used to be able to harvest 1,600 kg of tea per hectare, but in some instances we are seeing this fall to as much as 1,000 kg - this is a huge loss of income," Changazi said.

A two-hour drive from the Sukambizi Association Trust, on the road to Blantyre, Malawi's commercial capital, is the Satemwa Tea Estate, a company that buys green leaf tea from more than 170 smallholder farmers in the area.

Although the estate is also struggling with changing growing conditions, senior manager Chris Mazombwa says they are in a much better position than the farmers, who do not have the financial resources to withstand a bad harvest.

Small-scale farmers and members of the Sukambizi Association Trust weigh their green tea leaf produce

"We have been coming up with measures to try and adapt. We can afford some irrigation to make up for the poorer rain that we get, and we have embarked upon a replanting programme… that was quite big,” he said.
"The cost of replanting a field is in the region of [US]$5,000 and it takes five years before you can start harvesting. So although it is difficult for us, it is much harder for the smallholder farmer when you see the money needed to replant.”

Wilfred Kasitomu has been a small-scale tea farmer for over 30 years, regularly selling his crop to the Satemwa Tea Estate. "Because of this changing weather and the new diseases it brings, between 70 to 80 percent of seedlings we plant do not survive… [Those] that survive are just replacing the bushes that die each year,” he said.

With the harvests down, Kasitomu said, “Farmers can no longer send their children to school because we cannot afford the fees.

"Some people are starting to go hungry too. The lower income also means we cannot manage our fields as well as we used to, in terms of weeding and putting down fertilizers. The pests and diseases are also worrying us because we do not have the capacity to deal with them.”

Despite these setbacks the farmers are optimistic. "We are getting knowledge from Satemwa about how to adapt to the changing weather, and we have improved our environmental practices. The estate is helping us to establish our own nurseries so we can replant our crops at a lower cost,” Kasitomu said.

"We are trying to source seeds of indigenous and exotic trees that we want to plant in the area to improve the soil and attract more rain. It is possible for us to adapt to climate change if we get the right assistance,” he said.

"The problem is we cannot meet the costs of training, which is needed if we are to acquire the knowledge that will help us to adapt to the new climate patterns."

IRIN

South Africa's rooibos tea-growing area hit by increasing droughts

by Kristin Palitza

South Africa’s Rooibos tea has become a popular drink all around the globe. But prices of the herbal brew could shoot up within the next decade, as the Rooibos plant can only grow in one small region in the world – which is severely affected by climate change.

Pieter Koopman stoops down to inspect a young Rooibos bush. The farmer, who owns an 850-hectare tea farm in the Suid Bokkeveld, in western South Africa, is greatly concerned about the upcoming harvesting season. Droughts and erratic rainfall have destroyed more than half of his crop over the past decade. But he has hope that this year will be a better one.

"The last 10 years have been very hard. We had to learn to adapt to new weather conditions, and we still do. We can’t sit back and wait," says Koopman. Vital rain, which usually occurs in the South African winter between May and August, the traditional Rooibos planting season, has not been falling. "All our seedlings died. We made losses every season," the farmer sighs.

In response, Koopman and other farmers in the area started to change their farming techniques. They planted windbreaks with indigenous plants to stop soil erosion, built water catchments and, perhaps most importantly, started to plant seeds instead of seedlings. "Seeds take longer to grow, but are less sensitive to lack of rain," Koopman explains. "It was a tough lesson to learn."

If Koopman and his peers manage to successfully adapt to climate change, Rooibos lovers all over the world can breathe a sigh of relief: because the entire global supply of the red bush tea comes from a single production area, the South African Suid Bokkeveld, which measures just 20,000 square kilometres.

Attempts to cultivate it outside of this region have failed, as the plant needs the harsh conditions of the region, where temperatures drop to zero degrees Celsius during winter and rise to a blistering 48 degrees Celsius at the height of summer.

The farmers' concerns are justified. Experts predict that agriculture in sub-Saharan Africa will be severely affected by climate change. By 2050, changes in weather patterns will cause average rice, wheat and maize yields to decline by up to 14 percent, 22 percent and five percent, respectively, according to the Washington DC-based International Food Policy Research Institute.

"That’s why the long-term prosperity of Rooibos farmers will depend greatly upon their ability to change their farming practices to these new weather conditions," says Noel Oettle, rural programme manager of the Environmental Monitoring Group (EMG), a non-governmental organisation helping Rooibos farmers increase their resilience to climate change through natural resource management, monitoring weather patterns, soil and water conservation as well as promoting agricultural biodiversity.

"Only if farmers include in their decision making the likelihood of extreme weather events and focus on sustainable production, can the rest of us continue to enjoy Rooibos tea," reckons Oettle.

Rooibos tea has become a popular drink around the globe not only because of its sweetish nutty taste, but due to its many health benefits. Caffeine-free and rich in anti-oxidants, Rooibos contains a wealth of minerals, such as zinc, copper, calcium, magnesium and potassium and is known to act as a digestive aid as well as an anti-carcinogenic, anti-inflammatory and anti-viral.

According to the South African Department of Agriculture, the country exports about eight tonnes of Rooibos tea per year to key foreign markets, such as Germany, Netherlands, United Kingdom, Japan and the United States, but also to Chile, Poland and Russia.

Rooibos tea farming remains a small industry, with about 300 farmers, most of them smallholders who employ a handful of workers full-time, plus seasonal workers during harvest. The Suid-Bokkeveld is a poverty-stricken area that has seen slow economic improvement since Rooibos has become popular in foreign countries.

"Climate change is likely to have a negative impact on those exports because of the plant's geographic limitation, but also because there exists only one species of Rooibos. If it gets wiped out, that’s it," warns Rooibos expert Dr. Rhoda Malgas, a researcher at the Department of Conservation at the University of Stellenbosch in South Africa. By comparison, there are 25 species of Honeybush, another South African herbal tea of the fynbos variety.

One option to save South Africa’s Rooibos plant is to conserve the wild Rooibos plant, Malgas believes, which has been growing naturally in the Suid Bokkeveld for centuries. Wild Rooibos is hardier and more heat resistant than its cultivated cousin, with a more elaborate root system that can survive less rainfall.

"It would be wise to start building seed banks. If you conserve wild Rooibos, you can conserve the genetic material from which the cultivated Rooibos tea is derived," the scientist suggests.

Some Rooibos farmers have already caught on to the idea. Laurenz Dworkin, who owns a 100-hectare tea field in the Suid Bokkeveld, says he has considered harvesting wild Rooibos in addition to the cultivated variety. He also plans to collect its seeds to be able to protect his farm from the effects of climate change. "Wild Rooibos has not become a commercially viable product yet, but it has potential," he believes.

But Dworkin is concerned that the trend to commercialise the wild variety will ultimately do more harm than good. Because it grows more slowly, wild Rooibos cannot be harvested on the same scale as cultivated Rooibos – it can only be picked every two years. Yet, farmers desperate for quick profits might harvest the plant annually all the same, and ultimately destroy it.

"We desperately need responsible farmers who think long term and don’t kill the plants for fast profits," says Dworkin. "Instead, we should work on the assumption that Rooibos prices will keep going up. The plant might become more valuable because yields will decrease due to changing weather patterns."

Although EMG supports the farmers, it remains their own decision what farming practices they apply. Farmers are often reluctant to take the risk to try new approaches and Rooibos farming remains a small industry, without large amounts of research money behind it.

If Dworkin is right, a hot cup of Rooibos tea might soon cost consumers a premium.

IPS News

Kenyan farmers to benefit from export of packaged tea

by Rawlings Otini and George Ngigi

Marks and Spencer, a major retail outlet in Britain, will start stocking packaged tea directly from a factory in Nyeri — a move that could mark increased partnership between Kenyan tea factories and retail outlets in Europe.

Farmers from the little known Iriani Tea Factory, located four kilometres off the Othaya-Nyeri highway, are set to enjoy increased earnings following the launch of the tea value addition centre.

Marks and Spencer head of sourcing Louise Nicholls said the supermarket will boost speciality Kenyan tea consumption in Britain through its 700 branches.

Partnering with retail outlets boosts efforts to brand Kenyan tea and differentiate it from similar products from across the globe, creating a niche market for the country.

Kenya accounts for 24 per cent of the international tea market share.

Facilitators of the transaction, Fairtrade Africa, said the success of the project between Marks and Spencer and Iriani tea will see other retailers, such as giant outlet Sainsbury, seek to enter similar arrangements, upholding the practice of ethical sourcing which is highly valued in Britain.

Under ethical sourcing, outlets seek partnerships that have impact on the lives of disadvantaged or developing communities, contributing to raising their welfare.

More than 21 million people visit Marks and Spencer’s over 700 stores in the UK annually. Over half of the retailer’s business is in the food business.

In the pilot project, Iriani Tea Factory will deliver 1,350 kilogrammes of value added and packaged tea to the outlet in what could culminate into a long term contract. The first 10,000 packets, which bear the Fairtrade brand mark, left the country on November 20.

The farmers have high hopes that the product will be well received, warranting an official launch tentatively planned for February next year in Britain.

Iriani Tea Factory is fully owned by 6,000 farmers who are also its source of raw materials.

This year, the factory received Sh536 million from tea deliveries with Sh402 million being paid out to farmers.

The members look forward to receiving higher returns from the sale of processed tea. Kenya exports most of its tea, 95 per cent, in bulk raw form at the Mombasa auction.

At the auction, a kilo of the beverage fetches an average of $2.50 (Sh250), but with the value addition it will fetch approximately $6 (Sh600) with $0.50 (Sh50) being premium earned for selling under the Fairtrade mark.

The shilling, which has been battered for the better part of the year, could benefit from such initiatives which would increase the value of our exports tilting our balance of payments to a favourable position.

Kenyan tea is normally blended with other brands, an activity that dilutes its quality and identity.

“This means that pure tea from Kenya is likely to fetch higher prices due to its high quality, just as Ethiopian coffee differentiates itself (fetching more money),” said Amos Thiong’o, regional manager Fairtrade Africa-East Africa.

The project is funded by the British government through its aid arm, the Department for International Development (DFiD), to the tune of Sh7 million in a programme called FRICH.

The number of private companies investing in tea value addition has been growing in the recent past.

Value addition is done by flavouring, colouring, and repackaging into required measures. Products such as green tea and white tea emerge from the process.

High taxation and costly imported paper for packaging have retarded growth of value addition centres, industry players said.

To cut high transport costs, the few value addition firms in the country have set up bases around Mombasa, away from farmers who don’t benefit from them.

The number of active value addition companies could not be verified. Among the key investors in the market are Crown Gold Beverages Kenya Ltd, Kericho Gold, and Chai Trading Kenya Ltd.

Kenya is also seeking to increase the volume of its value added tea exports with a new licence for a processing plant in Nandi County.

Trade minister Chirau Ali Mwakwere gazetted 4.05 hectares of land south of Eldoret as an export processing zone (EPZ) to be used by investors to set up the plant.

“We expect it to start a value addition facility for tea exports having just met the first legal requirement of being officially gazetted,” said Export Processing Zone Authority public communications manager Jonathan Chifalu.

He said the investor’s choice of Nandi district was informed by availability of tea, adding that the investor did not want to go public about their identity or business structure.

The value addition initiative could see Kenya’s tea earnings rise beyond the Sh78 billion realised last year.

The Eldoret Export Processing Zone will become the 43rd in the country, in a race that began with only two such zones in Athi River and Mombasa.

The Eldoret tea plant is set to open new markets for farmers and create employment opportunities for thousands of jobless youth. It will also support Kenya’s long running campaign to diversify exports by shifting from raw materials to value added products. Leading importers of Kenyan tea are Egypt, Pakistan, Britain, and Afghanistan.

The Eldoret factory will, however, have to bear high transport costs being far from the Mombasa sea port. Most existing value addition centres are located at the coast to save on transport costs.

The move to woo local investors into EPZs comes at a time when the government’s figures point to growth of business in sectors that have traditionally been criticised for failing to use locally available resources to create quality employment.

The Economic Survey 2011 indicates a sharp rise in the value of exports from EPZs, boosting investor confidence even as industrialists blame the drastic drop in the number of jobs created on tough export market conditions.

Korean investors are currently running the Athi River-based Technology Development Centre, an institution that provides industrial and technical training to EPZ firms.

Kenya is seeking to boost its export base with rapid investment in industrial processing.

A significant volume of raw tea from Kenya ends up in Egypt, Pakistan, and Dubai for processing before it is distributed to other parts of the world.

The Tea Board of Kenya has hired a consultant to find ways of encouraging investors to put up value addition centres in the country.

Business Daily Africa

India’s Tata group plans to grow tea in Ethiopia

 India's Tata group plans to grow tea in Ethiopia and is working towards setting  up an automobile assembly plant in Mozambique as it seeks to expand business interests in Africa.

The group, owner of the Tetley tea brand, has approached Ethiopian authorities with a proposal to venture into tea farming in the landlocked country, said Esayas Kebede, director  of Ethiopia’s agriculture and rural development ministry.

“We are in communication. We have regions in Ethiopia that are suitable for tea

 cultivation, as you have regions such as Assam,” Kebede said in an interview in Hyderabad, where he attended an India-Africa business conference. Around 70% of 40,000 hectares allocated for contract farming has gone to Indian companies, he said.

Cheap land and labor costs in Africa are attracting Indian companies with business interests in agriculture, particularly pulses and edible oils. India imports around 8 million tonnes (mt) of edible oil every year and 3.5 mt of pulses.

Mint reported on 19 October that state-owned trading firm MMTC Ltd,  Indian Farmers Fertiliser Cooperative Ltd (Iffco) and plan to join the list of Indian

companies engaged in commercial farming in Africa.

Tade between India and Africa rose from $25 billion in 2006-07 to $53.3 billion in 2010-11 as both exports to and imports from the continent swelled, according to a report prepared by the Export-Import Bank of India for the lobby group Federation of Indian Chambers of Commerce and Industry.

Tata Africa Holdings (SA) Pty Ltd has a presence in 10 countries of the continent in sectors as varied as information technology, communications, automobiles, steel, hospitality, consumer products and chemicals.

Livemint

Zimbabwe maize production in four-fold increase since 2008, tobacco five-fold

Zimbabwe's finance minister Tendai Biti, speaking in parliament in answer to questions about government support for maize farmers, said,  "In 2008 the maize production was 400 000 metric tonnes but in 2011 the production of maize stands at 1,5 million metric tonnes. It could have been 1,7 million metric tonnes but because of the drought between December 2010 and January 2011 we lost 11 percent of hectarage.''

"The second crop is tobacco. In 2008 we produced 34 million kg and in 2011 our expected delivery will be 174 million kg and as I stand here 134 million kg have been delivered. In fact, with all the crops and livestock in Zimbabwe there has been a fundamental increase in production between 2008 and 2011 with the exception of two crops, tea and coffee. Even milk has risen to 94 million litres although this is still below the over 200 million that we need," he said.

Zimbabwe, he added, was set to meet its target of 500 000 tonnes of strategic grain reserves due to increased deliveries to GMB.

Minister Biti said Government had spent US$1,9 billion on agriculture since 2008, adding that they are also crafting an input scheme for vulnerable groups and large scale and A2 farmers this farming season.

Government had released US$10 million to pay farmers that have delivered grain but part of the money they are owed would be offset by inputs.

"What we have done is that we are gathering inputs to the tune of US$30 million and a farmer can liquidate his indebtedness with seed and fertiliser. But we will be able to pay any cent we owe by December 31 in the year of our Lord 2011," he said.

Minister Biti, however, took a swipe at the GMB for having a large salary bill that is chewing upUS$10 million a month. The parastatal would soon be unbundled into two companies dealing with collection of the strategic grain reserve and the other commercial activities.

Minister Biti, however, said the long term solution to ensure that farmers are paid on time was to have a commodity exchange.

The Herald

Kenya auction tea sales down 9 pct Jan-Sept 2011

Kenya's tea auction sales dipped 9 percent to 249.3 million kilograms in the first nine months of 2011, statistics from Africa Tea Brokers showed on October 4. The auction handled 273.8 million kgs of tea leaves during the same period last year.

Tea bushes across most of east Africa have suffered this year due to a devastating drought but high prices for the best quality Kenyan tea have benefited sales.

The weekly auction handles tea leaves from at least 10 eastern and southern African countries. Other producers selling through the Kenyan auction are Rwanda, Tanzania, Burundi, Malawi, Mozambique, the Democratic Republic of Congo and Madagascar.

Kenya, the world's biggest exporter of black tea, accounted for 181.4 million kgs, or 72.8 percent, of the total auction sales. It was followed by Uganda with 36.2 million kgs.

Lipton Limited -- part of food and consumer goods group Unilever -- maintained the leading buyer position. It bought 50.9 million kgs, down from 52.5 million in the first nine months of 2010.

Regulator Tea Board of Kenya estimates total tea output this year will fall by 34 million kgs to 365 million, but the country could rake in earnings of about 106 billion shillings, up 9 percent from a year earlier.

Reuters

Drought may reduce Kenyan tea production by a third

by Johnstone Ole Turana

Tea production in Kenya, the world’s biggest exporter of the black variety of the leaves, may drop by almost a third this year after a drought curbed yields. the 

“The weather has affected output and we predict a decrease of up to 30 percent of last year’s all time record output of 399 million kilograms,” Peter Kimanga, chairman of the Mombasa-based industry body the East African Tea Traders Association., said on Aug. 19. In July, the Tea Board of Kenya said output may fall as much as 25 percent.

East Africa experienced two poor rainy seasons that caused one of the worst droughts in 60 years, according to the United Nations Food and Agriculture Organization. Kenyan President Mwai Kibaki in May declared the drought a national disaster.

Tea is the biggest foreign-currency earner in Kenya, East Africa’s largest economy, which relies on agriculture to generate a quarter of its economic output. Tea production dropped 16 percent in the first half to 178.4 million kilograms (393.3 million pounds), the tea board said last month. Kenyan exports dropped 2.4 percent to 211.7 million kilograms in the first half, according to the tea board.

Industry officials are in discussions with the government to help add value to shipments of Kenya’s tea. The state currently levies a value-added-tax of 16 percent on all processed tea and charges a 25 percent import duty on packaging materials, Kimanga said.

“The country business environment is not conducive for tea processing as there are numerous levies and higher taxes which are punitive,” Kimanga said. “By doing value addition we can sale directly to new markets such as Eastern Europe, West Africa, southern Africa and the Middle East, who are currently buying from countries such as Britain which processes our tea.”

Pakistan is the biggest buyer of Kenyan tea, followed by Egypt, Afghanistan and Sudan, according to the tea board.

Bloomberg

Kenyan tea production up in July; exports down

by Sarah McGregor and Paul Richardson

Tea production in Kenya, the world’s biggest exporter of the black variety of the leaves, rose 8 percent in July to 26.3 million kilograms (58 million pounds) on improved weather conditions, the industry regulator said.

Shipments last month fell 2 percent to 37.4 million kilograms, with Egypt accounting for 19 percent of exports, followed by Pakistan and the U.K., the Nairobi-based Tea Board of Kenya said. The volume of tea sold through the world’s biggest auction in Mombasa in July declined 8 percent to 20.7 million kilograms, the board said.

Production of the leaves in the seven months through July dropped 14 percent to 204.8 million kilograms compared with a year earlier, largely due to lower rainfall, it said.

Unseasonably dry weather in East Africa has caused one of the worst droughts in the region in six decades..

Tea was Kenya’s biggest foreign-currency earner last year. Production may fall 30 percent this year, from a record 399 million kilograms in 2010, because of drier weather, Peter Kimanga, chairman of the East African Tea Trade Association, an industry group, said on Aug. 19.

Kenya’s is the world’s third-largest producer of tea, after China and India, according to the Rome-based FAO.

Bloomberg

Kenya tea output slumps due to erratic rainfall

by George Omondi

Erratic rains have squeezed tea production by 16.2 per cent in the first half of the year even as official statistics indicate growing demand for Kenya's produce in the domestic and international markets.

The country produced a total of 178.4 million kilogrammes of tea in the first six months of 2011 compared to 212.4 million kilogrammes in the same period last year, Tea Board of Kenya's (TBK) half-year results show.


Output from smallholder farmers contracted by 124.3 million kilogrammes to 105.8 kilogrammes as plantations produced 72.6 million kilogrammes-- a 18 per cent dip over last year's.

In Kenya, the small holder segment normally accounts for 59 per cent of the total production, with the enterprises producing and processing tea and branding it for the domestic market.

In the domestic market, tea consumption grew by more than 16 per cent in the period ending June 2011 to stand at more than 10 million kilogrammes, up from 8.6 million kilogrammes consumed within the same period last year.

At the global market, Kenya's tea won more export markets in the first six months of 2011, bringing to 48 the number of export destinations.

Pakistan remained the single largest importer accounting for 40.1 million kilogrammes followed closely by Egypt which absorbed 36.9 million kilogrammes of the country's tea exports in the first half of this year.

The recent wave of political upheaval in Arab countries affected Egypt and increased smuggling of commodities into the Afghanistan.

TBK said the country shipped 211.7 million kilogrammes of the brew in the first half of 2011, with exports level falling by almost 2.5 per cent to 211.7 due to political upheaval in North Africa.

Peter Kimanga, tea manager at Global Tea & Commodities Ltd, says the shift to value added tea also has the potential to lift the local tea industry to new levels, raising its export volumes to 500,000 tonnes.

"Market for value added tea has been steadily opening in Sudan and Yemen, UK and Somalia," Mr Kimanga said.

Business Daily Africa

India's Jayshree Tea & Industries to acquire African plantations

by Pradipta Mukherjee

Jayshree Tea & Industries Ltd. (JTI), the world’s third-largest tea producer, plans to acquire plantations in Africa as it seeks to double output in five years.

Jayshree wants to increase tea production to 50 million kilograms, Managing Director D. P. Maheshwari said. The Indian tea producer made three acquisitions in Africa last year to boost output as demand for the beverage exceeds supply.

“Organic growth has a limit,” Maheshwari said. “Unfortunately things in Africa move very slowly but I expect something concrete within the next three to four months.”

Jayshree joins McLeod Russel India Ltd. (MCLR), the world’s largest producer, in expanding overseas after output in India last year fell to the lowest level since 2005 because of pest attacks in the nation’s biggest growing region. Prices at auctions have almost doubled on average in the past five years, data from the state-owned Tea Board of India show.

“African region is the best place right now because labor cost is cheap and a company will get really good realization if exporting to Europe,” said Sanjay Manyal, a Mumbai-based analyst with ICICI Securities Ltd. “But tea prices are very high so the assets are going to be very expensive.”


Jayshree, which owns about 10,000 hectares (24,710 acres) of tea gardens and spent a total of 320 million rupees ($7.2 million) to buy tea estates in Uganda and Rwanda in the year ended March 31, expects another purchase to “improve production and profitability” as costs are lower in Africa, Maheshwari said. Acquisitions will be funded mainly with company’s profit, he said.

Tea production in India may total as much as 990 million kilogram this year as favorable weather conditions boosts yield, Maheshwari said. Output was 981 million kilograms in the financial year ended March, 2010, he said.

Jayshree’s tea productions from gardens in India may total 27 million kilograms this year and another 5.5 million kilograms may be supplied by plantations overseas, he said. The company produced 24.1 million kilograms of tea last year, he said.

Bloomberg

Zimbabwe: Hard times for tea, coffee farmers

by Obert Chifamba

The cool climate and the undulating plains of Manicaland, eastern Zimbabwe have nurtured thick bushes of lush green tea and coffee, acting as the basis of economic development for many people.

Today, places like Honde Valley, Katiyo, Tanganda, Cashel Valley and Chipinge, traditional heavyweights in tea and coffee production, have experienced waning fortunes owing to a plethora of challenges.

The woes of the tea industry mirror the broad challenges afflicting the Zimbabwean economy at the moment.

Tea prices are beginning to firm internationally but this is only felt by large-scale estates, which leaves the new farmers most of whom are in outgrower schemes still waiting on the fringes.

The price of tea is currently swinging between US$1,80 and US$2 for a kilogramme locally while the international markets are offering US$3 per kilogramme. On the other hand, coffee prices are ranging from US$3,50 to US$4 on the local and international markets respectively.

Producers however feel the prices fall short of upsetting the high costs of production, which leave them unable to sustain their operations without seeking financial aid from other sources. They also find it difficult to penetrate the lucrative international markets.

Places like Chipinge have unique weather patterns lending them to tea and coffee production as well as avocado and macadamia.

It takes a year or so to establish a coffee or tea nursery, followed by land preparation, then planting after which the farmer starts reaping profits only in the fifth year. This is generally a period of heavy financial and input investment into the crop yet dry in terms of income for the farmer.

"Many farmers involved in outgrower schemes find it difficult to pull through this stage as there will be no income to support their families yet they will be investing a lot of time and human resources into the project. Some have even opted out of the schemes," a manager at Clear Water Tea Estates commented. He added that most of the small-scale farmers did not have electricity and found it difficult to cure their tea and get good quality and competitive prices in the end.

"The crop is highly susceptible to fusarium wilt, which if not controlled can cause severe damage and losses. It requires a lot of spraying and is labour intensive right from the nursery, planting, weeding, irrigation, fertilization and harvesting. Coffee prices have been very low in recent years. They are only beginning to firm but that is countered by high fertilizer costs. Compound J that is needed for the crop is locally very expensive with the price ranging between US$34 and US$36 per bag."

Many players in the tea and coffee industry have since broadened their scope to accommodate alternative crops to raise their revenue levels.

Tanganda, which has an outgrower scheme of approximately 1000 farmers, is replacing tea with macadamia and introducing avocado in areas where tea yields are falling below minimum thresholds. There are already 120 000 hectares under macadamia, a hectarage that will be increased to 150 000ha by year-end while another 120 000ha will be put under avocado. At the moment macadamia and avocados are making their debut on the markets but are not bringing much as they are being sold locally and unprocessed. Macadamia nuts can be processed into soap, body lotions and cosmetics while the crushed nut can also be put on cakes.

Zimbabwe has just started exporting the product to South Africa, which in turn exports to Europe and England. Locally, Chinese business people are buying the crop and sending to China but in both situations the producer is getting the least profits.

The Herald

South African tea plantation faces collapse over labour dispute

by Stuart Graham

The largest tea estate in the southern hemisphere, Magwa Tea outside Lusikisiki in South Africa's Eastern Cape province, faces ruin after being looted and abandoned by its workers earlier this year.

The 1 803 hectare farm had a turnover of R65-million a season and provided jobs and career training for 1 200 permanent and 2 300 seasonal workers.

In February, the farm was shut down when workers, the highest paid in the tea industry, went on the rampage after management refused their demand for a 104% increase. By May, tea plants usually kept pruned to waist height, for ease of picking were shoulder high and useless. The plants stretch as far as the eye can see on both sides of the dirt road that winds across the hills from Lusikisiki to Mbotjie on the Wild Coast, in Transkei.

"The crop for the year has been lost," says Pierre Leppan, a director at the Eastern Cape Development Corporation (ECDC) which has managed the farm for the past seven years. The names of six managers are on a hitlist and the ECDC is unable to guarantee their safety. They are having to run the farm on their cellphones."

The farm had started thriving in recent years, after decades of plundering, corruption and mismanagement.

A Magwa manager says the trouble started last year, soon after union official was redeployed to Cape Town and replaced by two others.

"The workers and the management had a harmonious relationship until then," the manager says. "The two new officials were confrontational from the start. They misunderstood how Magwa worked. They thought, for example, that the management were the owners of the farm."

Last year, the new elected workers' council demanded a 104% wage increase, even though the workers federation FAWU had negotiated a 7% nationwide increase for agricultural workers. Magwa management told the council it was not authorised to approve the increase...

Incensed, the workers cornered managers in their office and assaulted them. A violent strike, which was later declared illegal, went on for three months.

"Throughout the strike, the managers had shots fired at them," the manager says. "Vehicles were stolen and vandalised. Houses were looted and burned."

The strike ended when the department of agriculture offered the Magwa employees a financial package to return to work. Production was soon back on line, but the mood at Magwa remained tense.

"Workers were not following management's instructions, which led to the suspension of programmes around the farm," says the manager.

In March, workers went on the rampage again. "They destroyed everything in sight. They stole what they could. Fridges, freezers, ovens and vehicles..."

The police were called and rubber bullets and tear-gas were fired. A manager was chopped with knives and a security guard was shot dead.

Permanent workers, who lived in houses on the 13 settlements on the farm and refused to take part in the strike, were chased off their properties by the seasonal workers who had assumed control of the workers' council.

FAWU official Tonga Mbaliese blames the management for the strike. He says the initial dispute was about the imposition of a 253kg a day tea plucking quota, up from between 180kg and 200kg.

"The target was set unilaterally without employees agreeing with it. The problems are caused by the style of management," Mbaliese says. "There is no transparency at Magwa."

Surrounding communities, politicians and tribal leaders have all laid claim to the land in past decades. Even after the plantation was established, it was beset by problems. Its assets were regularly plundered through corruption that continued into the 1990s.

Another problem was a demand by FAWU that workers receive higher wages at agricultural schemes. It was thought that state-run enterprises should set a good example in labour practices. As a result, Magwa workers became some of the highest paid tea estate workers in southern Africa. The high wages and poor profitability plunged the farm into financial trouble. A plan to lay off workers sparked violence in mid-2003 when 15 offices and a boardroom were burnt down.

In 2004, the ECDC, which was brought in as a custodian of the land, appointed a team of specialist tea farm managers to make the farm viable. It seemed an impossible task. Magwa was producing just 1.2-million kg of "made" tea a season. Exports were at a minimum and the cost of production was "extremely high" at R25 a kilogramme.

However, by 2007, Magwa was achieving its highest-ever production figures, with 2.7-million tonnes of "made" tea a season.

"The department of agriculture would give us R15-million a year, and we were giving them R65-million back," says a senior employee. "The tea was sold in advance on contract, making in roads into huge markets such as China, Pakistan and the United Kingdom."

This success was despite the infrequent and late arrival of government funds and a monthly wage bill of R3.5-million.

Before operations at Magwa shut down, workers were earning five times more than those in Malawi, the farm's general manager says. They were also earning bonuses and being taken out of the fields and mentored.

"We were taking from the bottom and building up skills so that they could take over the running of the farm one day," says the manager. Tea industry skills are in enormous demand around the world, so many of the Magwa workers were poached, but this was fine. We would train more. We became something of a university for the tea industry."

Now Magwa's future remains uncertain. 

Eastern Cape Rural Development spokesperson Ayabulela Ngoqo says a new Magwa board will be appointed on June 30, and will be tasked with finding a solution to the problems.

"The board will be given the prerogative to deal with all administrative matters affecting operations," he says.
"We won't have a harvest this year, but our main aim is to get it up and running again."

full article...Mail and Guardian

Kenya April 2011 tea output down

Kenyan tea production in April was down 12 percent from a year earlier due to poor rains and the crop for 2011 as a whole was likely to be 10 percent lower than in 2010, the Tea Board of Kenya said on May 23.

The regulator said Kenya, the world's leading exporter of black tea, produced 31.48 million kg of tea in April, down from 35.86 million kg in the same month in 2010.

"Lower production compared to the same period last year was largely attributed to depressed and poorly distributed rainfall occasioned by La Nina weather phenomenon," it said in a statement.

April exports rose slightly to 32.18 million kg from 31.87 million kg.

Pakistan was the leading importer of Kenyan tea, followed by Afghanistan, Egypt and Britain.

The tea board said production for the first four months of the year stood at 116.6 million kg, 20.9 percent lower than the same period in 2010.

"Going by the tea industry production performance for the first four months of the year, production for the year is likely to be lower by 10 percent, from 399 million kg recorded last year to 360 million kg," the board said.

Reuters

Burundi tea revenues up 109 percent in January over year before

Burundi's tea export earnings jumped 109 percent to $1.9 million in January compared with the same month a year ago, thanks to high volumes and a good quality crop, a tea board official said on February 24.

The landlocked country exported 593 tonnes in January up from $908,552 earned in the same period in 2010 from the sale of 326 tonnes, data from the state-run tea board (OTB) showed.

"It is true that the quantity of tea sold in January was high, but the quality of our tea lifted up both prices and earnings," said Remy Ndayininahaze, head of exports at OTB.

Ndayininahaze said the average export price climbed to $3.20 per kg from $2.78 in January last year.

The board says most of the tea sold this month at the regional auction in Mombasa was above $3 per kg due to an improved quality.

OTB forecasts tea output would reach 9,000 tonnes this year, up from 8,016 tonnes in the 2010 season, partly due to an increased use of fertlizers on farms.

The board earned $18.8 million in 2010 from export and domestic sales from $16 million in 2009.

Tea is Burundi's second largest hard currency earner after coffee and supports some 300,000 smallholder farmers in a nation of 8 million people.

Rreuters

Kenya drought cuts coffee, tea output

by Sarah McGregor

A drought may slow economic growth in Kenya for the first time in three years as farmers in the world’s biggest black-tea exporting nation scale back production and millions face food shortages.

Production of tea, the East African nation’s biggest foreign-exchange earner, may decline as much as 12 percent in 2011, according to the Kenya Tea Board. Forecasts for output of the country’s coffee, sold to Vevey, Switzerland-based Nestle SA, the world’s biggest food company, and Starbucks Corp., the largest coffee chain, were cut as much as 27 percent last month. Kenya’s coffee is considered to be the continent’s best quality by merchants and its tea is the most expensive in Africa.

Lower crop production “would have a chain effect on the economy,” Peter Mutuku, senior corporate currency trader at Nairobi-based Bank of Africa, said by phone on Feb. 1. “It would have a direct effect on a huge employment sector. Foreign- exchange reserves would also be affected, bringing pressure to bear on the shilling.”

Kenya relies on agriculture for a quarter of its gross domestic product and half its exports. The economy, the region’s biggest, expanded an estimated 5.2 percent last year. Lower growth than that would mark the first time the pace has slowed since 2008, when the country was engulfed by ethnic violence following a disputed election.

If the three-month rains due in March fail, “the worst- case scenario is it could knock 2 percent off of GDP in 2011,” said Wolfgang Fengler, the World Bank’s chief economist in Kenya. The current bank forecast is for GDP to expand by at least 5.3 percent in 2011 and as much as 6 percent if there are no “shocks,” he said.

The Kenyan shilling has declined 7.2 percent against the dollar over the past 12 months, trading at 81.08 per unit of the U.S. currency at 5 p.m. in Nairobi today.

The La Nina phenomenon, in which the surface of the Pacific Ocean cools and reduces moisture in the atmosphere, may curb rainfall through 2011, weather forecasters in Kenya say, following drier-than-usual rains in October through December.

The weather system is the same one that unleashed the worst flooding and storms in more than 50 years in Queensland, Australia, and killed 741 people in Brazil, according to Helen Bushell, regional program manager for Oxfam GB in Nairobi. At the same time, floods in South Africa have killed at least 123 and displaced 6,000 more, while in neighboring Mozambique, six people have died and 12,000 forced to flee their homes.

Two-thirds of Kenya received rainfall equivalent to about 70 percent or less of the long-term average in that period, Chanzu Bernard, an assistant director for forecasting at the Kenya Meteorological Department, said by phone. It was the least since 2008, when the country was plunged deeper into a drought that put 10 million Kenyans at risk of hunger and starvation.

“Another dry spell will dampen growth momentum,” Yvonne Mhango, an economist with Renaissance Capital Ltd., said in a research note on Jan. 26. She expects growth to slow to 4.9 percent this year from 5.3 percent in 2010.

Other countries in the region are also experiencing dry weather. Neighboring Somalia, in the throes of a two-decade civil war, has been affected. Somali Prime Minister Mohamed Abdullahi Mohamed warned of “catastrophic” consequences from drought unless the international community provides aid for its agriculture industry. As many as 2.5 million people in Somalia, home to 10 million, may die, Mohamed said Jan. 14.

Mauritius, off the east coast of Africa, is considering digging boreholes to alleviate water shortages, the government said in a statement on Jan. 19. More than half of Uganda’s 31 million people face food shortages because of drought, the country’s parliament said in October.

The four affected countries account for about 6 percent of the sub-Saharan African economy, according to World Bank data.

“There’s no getting away from the fact that if there is bad rain, that none of the East African nations would be able to weather it regardless of how other industries look,” Razia Khan, head of Africa regional research at London-based Standard Chartered Plc, said by phone.

Average prices for African tea may rise to $3.50 a kilogram by midyear, Aly-Khan Satchu, a Nairobi, Kenya-based independent financial analyst, said in an interview on Jan. 27. Prices averaged $2.69 a kilogram at a sale on Feb. 1, according to Tea Brokers East Africa Ltd.

“I’ve got a super conviction that the whole basket of the breakfast commodities, which includes tea, coffee, sugar and cocoa, is all in a parabolic price move,” Satchu said. “While tea has been lagging the price move, it is now going to play a degree of catch-up.”

Rising prices may also bode well for Kenyan tea companies, including Sasini Ltd., whose shares have risen 63 percent in the past year, and George Williamson Ltd., up 54 percent. The combined market value of the two companies is about $55 million.

Shares of Eaagads Ltd., a Kenyan coffee producer, have almost tripled over the past year to 58 shillings, while Kakuzi Ltd., a tea and fruit producer, has more than doubled to 77 shillings in the period. The two stocks are the top performers in the Nairobi Stock Exchange’s All Share Index since Jan. 1, 2010, according to Bloomberg data.

Kenya ships tea to as many as 38 destinations. The U.K., Egypt and Pakistan are among the top five importers, according to the Tea Board of Kenya.

The average price of African tea rose to $3.05 a kilogram in mid-January, approaching a record high of $3.11 in December 2009. The leaves are traded at an auction in the Kenyan port city ofMombasa, the world’s largest such sale.

“We are seeing sustained demand for quality tea,” Nick Munyi, managing director of Finlays Mombasa, a unit of John Swire & Sons Ltd., said in an e-mailed response to questions. Finlays Mombasa grows, processes and trades tea in Kenya. “If there is drier-than-expected weather the tea markets are likely to be stronger due to shortage of supply,” Munyi said.

Kenya cut its coffee production forecast for the 2010-2011 season through September to 40,000 metric tons from a previous estimate of as much as 55,000 tons, the Kenya Coffee Board said on Jan. 17. The country grew 45,000 tons last season.

Over the past three months, basic food items including corn, beans, rice and cooking oil valued at 1 billion shillings ($12.3 million) have been distributed and water boreholes drilled in drought-affected areas, said Andrew Mondoh, permanent secretary in the Special Programs Ministry.

Kenya has a better chance of coping with this dry spell because domestic prices for corn, a staple food, have fallen about 50 percent from $400 a metric ton in July 2009 during the height of the last drought, said Fengler of the World Bank.

“The problem is that we haven’t moved into a situation of a significant recovery” in rainfall since 2009, said Bushell. “Economies were picking up, and now that threatens to be significantly undermined,” she said. “If the next rains do fail we may have significant humanitarian crisis in the region.”

Bloomberg