Tea earnings at Mombasa auction hit Ksh137b – report
Tea earnings realised at the Mombasa auction increased to Sh136.6 billion in the 2022 production year, according to a new market report by the East African Tea Traders Association (EATTA).
The report shows that earnings during the period increased by 28.8 per cent from Sh106 billion posted in the 2021 period.
The impressive earnings which exclude local sales were realised despite the effects of the Covid-19 and destabilisation of some export destinations following political disturbances, for example, the invasion of Ukraine by Russia.
Edward Mudibo, EATTA managing director said that during the review period, farmers sold 481.9 million kilogrammes of tea at an average price of $2.29 (Sh283.502), an increase from $1.99 (Sh246.362) registered in 2021.
The volume sold through the auction, he explained in the report, increased by 11.4 million kilogrammes from 470.5 million kilos traded in 2021.
Increased drought
“Despite the challenges witnessed during the year, for instance, increased drought, prices remained above $2 (Sh247.6) unlike in 2021 when more than half of the year prices remained below the two-dollar mark,” said Mudibo.
He attributed the impressive earnings mainly to the high quality and demand of the commodity in various international markets. Key export destinations – Pakistan, Egypt, Sudan and the United Kingdom maintained strong support for Kenya tea despite the prevailing Covid-19 effects that continued to hammer the global economy.
In the production year 2021, Mudibo noted that during auction weeks 28 and 29, traders rejected the highest volume of tea at 55.47 per cent and 50.37 per cent respectively. This is when Kenya Tea Development Agency (KTDA) introduced a reserve price to tame declining earnings for the farmers. In the period under review, the highest recorded volume reached 39.2 per cent during Sale 40 in the month of September.
Between July and December 2022, small-scale farmers affiliated with KTDA benefited from an average auction price of Sh326 per kilogramme of made tea compared to Sh306 over the same period in the 2020/2021 financial year.
David Ichoho, KTDA chairman attributed the increased earnings to the high quality of tea as well as increasing demand, especially in the developed markets.
“We expect farmers’ proceeds to benefit from high earnings in the current financial year as traders and consumers in Europe and other developed markets are demanding more due to the winter season,” he said.
“Equally, we have continued to ensure farmers are producing high-quality tea to earn from premium prices in the international markets,” Ichoho said after announcing the 2022 mini-bonus.
Last week, KTDA released to small-scale farmers Sh5.5 billion mini-bonus ahead of the opening of schools next week.
Ichoho said that from the disbursed money, Sh.2.7 billion is the payment with respect to mini bonuses for the factories, whose directors passed resolutions to pay mini bonuses to their farmers.
Ichoho said the balance of Sh.2.8 billion will go towards paying farmers for the December green leaf delivered to factories.
“Farmers will be paid between Sh5 and Sh10 as a mini bonus per kilo of green leaf delivered to their factories for the six months up to December 31, 2022. The Sh.2.7 billion mini bonus payment represents 449 million kilos of green leaf delivered to KTDA-managed factories over the six-month period,” he said.
School fees
Agriculture Cabinet Secretary Mithika Linturi said in December 2022 during the KTDA Annual General Meeting, he requested the board to consider making a mini bonus payment to the farmers in January so that they could be able to pay school fees considering that schools reopen later this month.
The CS who spoke during the disbursement of the mini bonus to small-scale tea farmers said the government is committed to helping the management of KTDA to improve the earnings of the tea farmers.
