Kenya Tea Stocks Advance as Pests Damage Indian Supply, Spur Higher Prices

Tea companies in Kenya, the world’s largest exporter of the leaf’s black variety, advanced on speculation prices will climb after pests damaged crops in India.

Kakuzi Ltd., a tea and fruit producer, headed for its highest close since Sept. 2, adding 4.46 percent, to 82 shillings. Kapchorua Tea Co. Ltd. gained 3.9 percent to 135 shillings, its highest intraday trading level in more than two weeks.

George Williamson Kenya Ltd. rose the most since Aug. 26, surging 2.7 percent to 190 shillings, while Sasini Ltd., a tea and coffee grower, jumped the first day in four, rising 0.8 percent to 13.15 shillings.

“In Kenya we are having record production coupled with higher prices which is auguring well for the sector this year,” Eric Musau, a research analyst with Nairobi-based African Alliance, said by phone today. “Global production hasn’t been too good which works in favor of local production.”

Pest damage may see output in the main growing region of India plunge by 20 million to 22 million kilograms, Russel India Ltd., a tea plantation company, said today. India is the world’s second-biggest tea grower after China.

To contact the reporter on this story: Sarah McGregor in Nairobi at Smcgregor5@bloomberg.net

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