Following an outcry by small holder tea farmers across the country on bonus price set by Kenya Tea Development Agency (KTDA), the agency has put out a statement stating that farmers are to earn an average of Sh 41.27 per kilo of green leaf delivered.
The agency said, its managed factories earned a total of Sh 69.77 billion from tea sales for the year ended 30th June 2019.
According to the agency, there was an oversupply of tea during the period under review by 200 million kilograms, with a supply of 5.8 billion kilograms against a demand of 5.6 billion kilograms. “Most tea producing countries have registered increased production, while importing markets have experienced political and economic challenges,” read part of the statement.
Pakistan, Egypt, UK, UAE and Sudan remain Kenya’s key markets for the black CTC processed tea. During the period, KTDA managed factories processed 1.13 billion kilos of green leaf into 262 million kilos of black tea, which sold at 18 per cent less than the previous year. Except for the UAE, the other markets experienced currency devaluation that reduced the purchasing power of the consuming population.
This year, factories have earned Sh 69.77 billion representing an 18 per cent drop compared to a year earlier. From this revenue, farmers are set to earn a total of Sh 46.45 billion, Sh 17.69 billion initial monthly earnings and Sh 28.76 billion as the second and final payment.
The agency added, “KTDA-managed factories are facing challenges such as high cost of energy and labour. These factories are also grappling with other challenges like tea hawking that has led to a reduction in the amount of green leaf available to some factories, thereby adversely affecting their operating capacity, and quality of leaf available for processing.”
Kenya is the leading exporter of black CTC teas in the world, accounting to 23 per cent of the global exports with KTDA accounting for 13 per cent.