Farming News - Analysts warn of rising tea prices on Kenya drought

Analysts warn of rising tea prices on Kenya drought

Analysts have speculated that drought in Kenya’s tea producing regions could result in tea prices rising around the world next year. The Kenyan droughts, along with rising production costs around the world, may increase pressure on supplies, causing rises in tea prices, which have not yet been affected by volatility which has hit other commodities.

Drought in East Africa remains a massive problem, currently affecting around 13million people in the drought afflicted countries of Kenya, Somalia, Djibouti and Ethiopia. The BBC has reported that campaigners in Kenya have blamed corruption for the effects of the drought, which is threatening to turn to famine in the country's worst hit regions.

Railing against government corruption and poor judgement, including its scandalous decision to sell of the strategic grain reserve in 2008, campaigner John Githongo said, “God makes droughts, men make famines; the drought we have in Kenya is a governance drought.”

Until now global tea markets have managed to balance supply shortages and soaring demand for tea, avoiding the factors which have caused other commodities to rocket. Last year, although production in India and Sri Lanka dropped because of a late monsoon, Kenya harvested a record yield.

However, Trade magazine The Grocer this week reported that, with global demand for tea rising, particularly in China and India, balancing supply and demand could prove difficult. Analysts say the forecast for next year may not be as bright. Drought in East Africa could reduce production by more than 128,000 tonnes.