Business

Production by small-scale tea farmers jumps 15pc

Wednesday, February 28th, 2024 01:07 | By
Data shows during the review period the average price of KTDA teas went up by 3 per cent from $ 2.70 per kg to $2. 78. PHOTO/Print
Data shows during the review period the average price of KTDA teas went up by 3 per cent from $ 2.70 per kg to $2. 78. PHOTO/Print

Greenleaf production output for smallholder farmers under the Kenya Tea Development Agency (KTDA) for the last seven months rose by 15.2 per cent, a drastic increase that has been attributed to favourable weather conditions.


The June 2023 to January 31, 2024 period saw farmers produce 763,208,762 million kilos compared to 662,565,605 million kilos of green leaf delivered to KTDA-managed factories within the same period in the previous year.


The increased production of Kenya’s main cash crop which is exported to main global markets such as Russia, Pakistan, Sudan, Egypt, Afghanistan and the United Kingdom has also been attributed to subsidised fertiliser and ample rains within the same period. Wilson Muthaura, the KTDA Group Chief executive, disclosed in a statement that the agency was working around the clock to better its sales for more returns to farmers.


“We are working round the clock to push as much tea as possible working with other stakeholders including government agencies. Our single focus remains improving the earnings for the farmers,” he said. During the review period the average price of KTDA teas went up by 3 per cent from $ 2.70 per kg (Sh389) to $2. 78 (Sh400.70).


According to KTDA, the increase in processed teas, especially in the West of Rift is due to the monthly advance payments structure where factories have increased their rates attracting more green leaf.
The factories increased their rates from Sh20 to Sh24 for one kilogramme of green leaf while factories in the East of Rift increased their rate from Sh21 to Sh25 from January 2024.


As a result of the increase in green leaf production, KTDA reports revealed that it sold 152 million kilogrammes of processed tea compared to 148 million kilograms within the same period last year representing a 2.8 per cent increase in sales.


Over the same period, there have been gains from favourable forex exchange rates which are expected to spur earnings for the farmers compared to the same period last if the sales trend is maintained.
“The global tea market faces headwinds, with rising production costs and fluctuating demand,” added Muthaura.


“Despite these challenges, KTDA remains focused on maximising value for our smallholder farmers. We continue to work tirelessly to push as much tea as possible while exploring new markets and value-added opportunities.”.


In September 2023, KTDA announced a record 44.15 billion final payout to smallholder tea farmers. The final payout lifted farmers’ total earnings for the year by 7.6 per cent to an all-time high of Sh67.7 billion from Sh62.89 billion at the same time in 2022.


The growth in earnings to farmers is largely attributable to improved tea prices in the international market where the average tea selling price was recorded at Sh341 per kilogramme(kg) in the period from Sh311 previously. Tea farmers are expected to earn an average of Sh59.02 for every kilo of green leaf sold from Sh50.18 last year-- marking a 17.6 percent increase in the average total earnings per kilo.

The improved pricing of green leaf is in the backdrop of ongoing reforms in the sector which for instance saw the introduction of a minimum tea price/ reserve price at the Mombasa auction in July 2021.
According to KTDA Holdings Group Head of Corporate Affairs Ndiga Kithae the reserve price at the auction has provided a cushion for farmers by ensuring their teas are not sold below a certain price point.

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