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Rwanda Lowers 2013 Tea Earnings Outlook After Prices Drop

Nov. 6 (Bloomberg) -- Rwanda lowered its outlook for tea earnings after prices fell at the regional auction in the Kenyan port city of Mombasa, where the country channels more than two-thirds of its output, an industry official said.

Income is forecast at $60 million this year, down from an earlier estimate of $83 million and compared with 2012 earnings of $66 million, Eric Kabayiza, planning director at the state-run National Agricultural Export Development Board, said yesterday in an interview in the capital, Kigali.

Tea production in Rwanda, Africa’s sixth largest producer, is expected to rise to 28,600 metric tons this year from 22,563 tons last year. Higher volumes at the weekly Mombasa auction has pushed down prices, said Kabayiza.

The average auction price was $2.47 per kilogram in the year to date, falling from $2.84 per kilogram over the same period last year, Tea Brokers East Africa said on Oct. 29.

Offerings through the auction have risen 24 percent to 398.4 million kilograms (878.3 million pounds) with shipments also coming from Kenya, Uganda, Tanzania, Burundi, Malawi, Madagascar, Democratic Republic of Congo and Mozambique, the organization said.

The government in its national tea strategy says if farmers take steps such as adopting modern agricultural practices and applying fertilizers they can boost yields to as much as 10,000 kilograms a year from about 7,000 kilograms.

About 60,000 households are involved in production of the leaves in a population of 11.5 million.

Coffee production in Rwanda is forecast to rise by 8 percent this year to 26,000 tons, fetching $75 million, up from $61 million last year, Kabayiza said. The forecast for earnings was cut from a previous estimate of $99 million, he said.

Rwanda’s tea and coffee exports represent the biggest source of foreign-currency after tourism and mining.

To contact the reporter on this story: Saul Butera in Kigali at sbutera2@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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