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Sri Lanka Equity Forum » Stock Market Talk » Frost damages Kenyan tea crop: Frost attack said to be the worst ever

Frost damages Kenyan tea crop: Frost attack said to be the worst ever

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SLMarketWatch


Senior Equity Analytic
Senior Equity Analytic
idAFL6E8C524820120105_ (af.reuters.com)

* Frost attack said to be the worst ever
* Seen cutting Jan output of big group KTDA by 20 mln kg

By Beatrice Gachenge

NAIROBI, Jan 5 (Reuters) - Kenya, the world's biggest exporter of black tea, has lost a significant part of its tea production for this month due to severe frost in key growing areas, which could cut its foreign exchange earnings, a major industry group said on Thursday.
In this week alone, about 20 million kg of green leaf was damaged by frost, which occurs when temperatures plunge at night after hot days, said Alfred Njagi, general manager of operations at the Kenya Tea Development Agency (KTDA).

The agency earlier had projected green tea production for January at 85 million kg.

KTDA groups most of the country's small-scale tea farmers, who jointly produce an estimated 60 percent of Kenya's tea exports.
"We are looking at about 20 million kg of green leaf we have lost, whose value is in the region of 1 billion shillings ($11.4 million)," Njagi said, adding that this was the worst ever case of frost to hit the country.

"There is frost bite across all the tea growing areas ... we expect that severe weather may continue having an effect.

The rest of the country's tea exports are produced by privately owned plantations. Officials at several plantations could not be immediately reached for comment.

The Tea Board of Kenya could also not immediately give a figure for the loss in output countrywide.

Tea is the highest foreign exchange earner in east Africa's leading economy, and exports of the commodity are expected to rake in an estimated record 106 billion shillings in 2011, up from 97 billion shillings in 2010. ID:

Njagi said the frost damage is expected to extend into the future, following adverse effects of climate change.

"The conditions that precipitate frost bite have not been eroded, which are very high day temperatures and very low night temperatures. The drop in temperature from day to night is very rapid, so young shoots tend to freeze," Njagi said.

Following the frost, KTDA has downscaled its estimate of January production to 65 million bags of unprocessed tea. The worst hit areas are mostly in the Rift Valley.

It takes about two to three months for tea bushes to recover from such a frost, Njagi said.

Total national exports of the commodity stood at 247.3 million kg last year down from 259 million in 2010. ($1 = 87.9000 Kenyan shillings) (Additional reporting by Jacob Kuehn; Editing by James Macharia and Jane Baird)

story.html_ (timescolonist.com)

Frost damages Kenyan tea crop

sri-lanka%E2%80%99s-tea-industry-survives-the-frost-attack-while-kenya-suffers_ (news360.lk)

Sri Lanka’s tea industry survives the frost attack, while Kenya suffers

Sri Lanka’s tea plantations situated in and around Nuwara Eliya district have survived the ground frost and the extremely cold weather experienced in the area in the early parts of January, says a Tea Broker.

“With temperatures plummeting to well below 10 Celsius, the ground frost mainly affected the vegetable cultivation with no serious damage to the tea plantations in an around Nuwara Eliya” stated John Keells Tea Brokers in its weekly tea market report.

The Tea broker also said most planting districts which experienced a spell of dry weather at the commencement of the year are also experiencing afternoon showers.

It says, this situation will help boost crop Intakes which are currently moderate to low.

According to the Tea broker, the low grown tea planting areas have experienced isolated showers in recent days; however crop intakes have not shown any significant improvement.

John Keells tea brokerage says Middle Eastern tea buyers have been active during the week whilst the Russian/CIS buyers have been subdued.
Kenyan tea industry

While Sri Lankan tea plantation survived the frost and the extremely cold weather experienced in the recent days, its main competitor Kenya has suffered heavily.

According to John Keells, hundreds of acres of tea gardens in Kenya have been badly damaged due to the frost attack.

This situation, analysts believe will impact the Kenyan tea production.
Kenya is the largest black tea exporter in the world.
tea-farmer-2012010931139.html_ (afriquejet.com)

Tea farm workers fear job losses after frost destroys crop

Kenya - Fear of job losses has gripped tea farm workers in Nandi County after frost destroyed hundreds of acres of the cash crop in the area. Multi-national tea firms and tea farmers in the tea zone are counting losses after their plantations were affected by frost following a stint of unusually low temperatures. Tea experts have warned that the situation could result in job cuts and threaten food security in the county since other crops like maize have also been affected.

However, by Sunday some of the multi-national tea firms that have suffered assured their workers that no one would be laid off due to the natural catastrophe.

According to the general manager of Nandi Tea Company, Mr Abdi Noor, the frost attacked 300 acres out of more than 1,000 acres of tea estate. He said that the company had so far made losses amounting to Sh20 million.

He told the Daily Nation that already 30 per cent of tea in Nandi is under attack from frost but assured employees that they would be assigned duties of clearing and plucking down destroyed tea plants.

The affected trees would take about two months to fully recover.

Mr Joseph Lagat, a tea expert and former director of EPK Tea Company, recalled that when frost first occurred in the area in 2005, most companies made loses amounting to millions of shillings forcing some of the them to venture into business of growing trees for environmental protection.

He added that crops like potatoes, tomatoes, maize, fruits, beans and vegetables of all kind and perish whenever frost comes calling.

Williamson Tea Company, The Eastern Produce Tea Company of Kenya, Tindiret Tea, Kapchorwa Tea Company and Kaimosi Tea Company are some of the multinational tea firms which own thousands of hectares of tea plantations in Nandi County.

index.php (island.lk)

Ground frost in Nuwara Eliya not serious enough to affect Tea
January 15, 2012, 7:15 pm

By Steve A. Morrell

The John Keels Tea Brokers’ weekly Tea market report said that ground frost in Nuwara Eliya, was not intense enough to affect tea crops. Areas affected were tracts of Tea land bordering the Kandapola flats, and low lying Tea fields of Mahagastota. Additionally peripheral frost bite in Tea fields bordering shallow forest reservations in Upcot, Bogowantalawa, Maskeliya, and Upper reaches of Talawakelle. Also some interior areas of Lindula and Agrapatana. Temperatures sank down low, seriously affecting vegetable cultivation in Kandapola.

The encouraging feature of last week’s sale was the upward surge of prices. Tea Brokers said quality weather late December, resulted in higher price averages. Westerns realized price increases of about Rs. 50. per kilo which were reported to be good. Bright liquoring Nuwara Eliyas too recorded good returns.

However quality weather was short lived. Over the past few days, there had been rainy afternoons with warmer nights which is unusual for this time of year. Attributable feature of this weather change, is that crop intakes would not be seriously affected.

Frost bite in Kenya was an interesting news coming from the continent. Reports from that origin said hundreds of acres of Tea were affected, contributing to lower crop intakes that could affect global production. Kenya is the world’s largest producer of black Tea.

Meanwhile Asia Siyaka Tea brokers said that Pakistan increased their imports of Ceylon Tea last year. January to December Ceylons exported to Pakistan was 1.7 million kilos. Buy all counts, they said this augers well for

Ceylon Tea exports to that destination. Itmeant that there was now an open bung that could account for increased shelf space for Ceylons.
Pakistan was one of our major Tea destinations which we lost. Now with increased bi-lateral trade between both countries possibilities for re-capturing that market was not that remote, brokers said.

Kenya continues to be the major Tea exporter to Pakistan, absorbing 58.44 %, followed by India,16.59 %, and most other African Countries. Sri Lanka’s contribution was only 0.47 % . ‘Not sounding too optimistic this could increase, but not speedilly’, they said.

India continued to be the largest producer of Tea in the world, producing 937 million kilos. in 2010. Followed by Kenya, 360.68 , and Sri Lanka was third continuously at around 315 million kilos .

Irrespective of continuous Middle East unrest buyers from that sector were more active last week.

There was some speculation that the US blockade of Iranian trade interests could have fall-off effects for Ceylon Tea, but at this point in time nothing was certain. At least not in specific terms that could affect Ceylon
Tea exports.

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The above post is not meant to influence anyone\\\'s decision to buy/sell/hold/ rotate any stock or commodity.

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aj


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
"It says, this situation will help boost crop Intakes which are currently **moderate to low.**"

"crop intakes **would not** be seriously affected."

"however crop intakes have not shown any significant improvement"

That means Sri Lankan tea production is also affected may be not very seriously.

2. And Sri Lankan tea production is also unproductive. Costs too much. What about taxes on raw materails.

3. This weather could be worsen or better tomorrow, next month. That's why plantations are going at a low price.

Points for investors to think.

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