• Food & Agriculture Organisation sees black-tea prices falling
  • Purple, orthodox tea earn 10 times more than black tea

Kenyan tea growers are diversifying into higher-priced varieties as tastes change and prices of the black variety of the beverage the East African producer is known for becoming volatile. 

From the rich volcanic soils on the slopes of Mount Kenya to the cool highlands of the Rift Valley, growers are either planting a new variant with purplish leaves or converting production from the common bush to more lucrative types; white, green and orthodox.

In Meru county in central Kenya, grower Njeru Industries has 150 acres (60 hectares) under purple bushes and has been exporting 60,000 kilograms (132,277 pounds) annually to Japan at $30 per kilogram, according to Director Roselyne Njoki. In comparison, the top grade of conventional black tea introduced to the country by British settlers in the 1940s, of which Kenya is the world’s biggest exporter, sold for about $3.12 per kilogram at the latest auction.

“We are purely a specialty grower,” Njoki said by phone, adding that there was more demand for the purple variant than the other three specialty teas Njeru produces on 350 acres for sale in Britain and China. White tea earns the company as much as $40 per kilogram, she said.

The United Nations’ Food and Agriculture Organisation sees supply and demand for black tea “in equilibrium” at a price of about $2.81 per kilogram compared to an average of $2.59 per kilogram this year. Prices may drop by as much as 40 percent by 2023 if producers around the world increase supply by about 5 percent, the FAO said in a statement posted on its website, advising grower nations to promote domestic demand and diversify into organic and specialist teas to protect earnings.

Asian market

The purple kind was developed by Kenya’s Tea Research Institute. The government agency says the variety may hold medicinal properties. In Japan, Njeru’s customers are turning the leaves into capsules and creams used in the beauty industry, Njoki said.

Consumers around the world are also switching to varieties considered healthier for carrying high levels of anti-oxidants or less caffeine, said Elizabeth Kimenyi, the interim head of the Tea Directorate, the industry regulator. Purple tea contains anthocyanin, a pigment rich in health-promoting flavonoids, that gives it its reddish tinge, according to Njoki.

Orthodox tea -- derived from the same bushes as black tea but processed differently -- earns between $7 and $25 per kilogram, according to Robert Keter, chief executive at Emrok Tea Factory. It is manufactured using a traditional process that includes a longer fermentation period and hand rolling whole leaves, instead of the crash, tear, curl, or CTC, method used in black-tea processing.

Four-year-old Emrok churns out 400 kilograms of orthodox leaves in addition to the 15,000-kilogram daily output of black tea. It has also planted purple bushes on a portion of its 1,000-acre (405-hectare) estate.

“It’s the way to go to secure Kenya’s tea industry,” Emrok’s Keter said in an interview in the capital, Nairobi. “There is market for purple tea. It’s particularly well received in Asia.”

Price shocks

Drought this year may cut black-tea output by a 10th to about 400,000 tons, according to the government agency. The drop in supply has pushed average prices up by about 43 percent this year, after they fell 26 percent in 2014, according to data from Tea Brokers East Africa Ltd., a Mombasa-based trader.

“Diversification is the way to go to boost prices,” said Edward Mudibo, managing director of East Africa Tea Trade Association. “It will act as a shock absorber when there is oversupply of tea like there was in 2014.”

Kenya exports 95 percent of the tea it produces, Mudibo said. Top buyers include Britain, Egypt and Sudan, whose purchases help generate about $1 billion of foreign-currency earnings annually. 

Most of it is black tea sold an auction in the port city of Mombasa. The weekly sale that handles over 70 percent of tea exported from Kenya would require large volumes before trading specialty types, Mudibo said.

Prices for black tea have been so unstable that the 3,000-acre Kiptagich Tea Estates contemplated clearing some of its crop and replacing it with gum trees, Marketing Manager Edwin Bii said in an interview.

To avoid such drastic action by growers, the government is now mooting a fund to guarantee farmers a minimum price when prices slide, according to Kimenyi.

“While we still study income stabilization mechanisms, we are asking farmers not to uproot their the tea trees, but to diversify,” she said.

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