Kenya’s Low Tea Exports Lead to Weakened Shilling

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[D]rought, lower tea prices, and economic sanctions against Iran have led to lower tea exports for the world’s largest black tea producing country. The country’s “long rains” season was unusually dry; World Tea News points to Tropical Cyclone Idai, saying that the storm redirected moisture away from the region. According to Bloomberg, production during the first five months of 2019 was 170.18 million kilograms, markedly lower than 2018’s 187.69 million kilograms. Jointly, the average auction price this year is $2.25 per kilogram, a nearly 20% drop compared to last year’s $2.80. Ultimately, the lower tea exports, paired with the drop-in tourism and the flower industry, have resulted in Kenya’s economy dropping to 104.07 shillings per dollar and its fifth straight month in decline. The Kenyan schilling is now on track to be at its lowest level since October 2015.

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