Tea from Nandi, Kisii fetches high prices for first time in 20 years
Workers pick tea in Nandi Hills. Tea from western Kenya has for the first time in 20 years attracted a high average price. PHOTO | FILE
What you need to know:
The price of a kilogramme from Kisii and Nandi regions fetched $3.90 (Sh354) in last week’s auction with the one from Meru trading at $2.70 (Sh245).
Middle East buyers are scrambling for tea from western Kenya because of its deep colouration, which is one of the attributes on which traders base their offer prices as consumers have a high preference for it.
If the trend continues, farmers from the region could get higher bonus that is normally paid to farmers affiliated to Kenya Tea development Agency (KTDA) in the month of October.
Tea from western Kenya has for the first time in 20 years attracted a high average price than that from Meru which has been a favourite at the Mombasa auction.
The price of a kilogramme from Kisii and Nandi regions fetched $3.90 (Sh354) in last week’s auction with the one from Meru trading at $2.70 (Sh245). The Meru region has traditionally produced the most expensive teas as realised from sales at the auction.
According to traders at the auction, Middle East buyers are scrambling for tea from western Kenya because of its deep colouration, which is one of the attributes on which traders base their offer prices as consumers have a high preference for it.
“Buyers like tea with deep colour and this has been the main reason why the Kisii tea is now selling at a higher price compared to the ones from Meru,” said Peter Kimanga of the Global Commodities Holdings.
Highest bonus
If the trend continues, farmers from the region could get higher bonus that is normally paid to farmers affiliated to Kenya Tea development Agency (KTDA) in the month of October.
Factors affecting bonus payment include actual auction prices, cost of production and individual factory efficiency.
Last year, Meru region received the highest bonus with Imenti Tea Factory emerging top at Sh26.50 a kilogramme. Historically, factories in the Mt Kenya region fetch higher payments than those in western Kenya based on the factory prices at the auction.
KTDA smallholder farmers are paid an initial payment on a monthly basis at the rate of Sh14 per kg of made tea. In the last financial year, farmers earned Sh17 per kilogramme as the second payment, down from Sh31 the previous year, representing a 25 per cent drop in their income.
The move was precipitated by oversupply of tea in the market, with volumes of made tea having grown from 206 million kg in 2012, 255.7 million kg in 2013 and 255.9 million kilos last year.
A total of 560,000 small-scale tea farmers deliver leaves to 66 factories across the country. Tea prices at the Mombasa auction hit a one-year high last week as severe drought continues to take a toll on the volumes of the country’s top foreign exchange earner.
In last week’s auction, a kilogramme of tea traded at $2.85 (Sh259) from $2.64 (Sh240) at the weekly auction, representing eight per cent increase.
About 5.8 million kg of tea were offered for sale in last week’s auction against 6.2 million kg in the previous week.
Kenya is the leading exporter of black tea in the world, selling 400 million kg to the global market annually, with only 25 million kg of the beverage consumed locally.
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