advertisement

Economy

KTDA warns El Nino will cut tea prices

Kenya Tea Development Agency has warned farmers that El Nino rains will cut tea prices and earnings in the next season and called for the abolition of a new government tax.

KTDA chairman Peter Kanyago reckons that the heavy rains will result in a glut that pulls down prices. Earnings improved last season by 21 per cent to Sh43.25 billion on high international prices and weaker shilling against the dollar.

This marked a rebound from the previous season when an upward spike in tea production led to a drastic fall in tea prices by up to 30 per cent.

“Mount Kenya region has not experienced the heavy rains but in case it does, the crop will do well. However, I cannot speculate to what extent the prices will fall,” he said.

In Nyeri, tea farmers have threatened to directly source for international buyers and drop the agency if prices do not improve. Activists have pushed for the disbandment of the KTDA board.

Speaking at Gitugi Factory in Othaya, Mr Kanyago dismissed the threats as petty politics by people seeking political mileage ahead of the 2017 polls.

“We offer our farmers nothing but the best,” he said. He asked the government to abolish the tax imposed on packaged tea sold to international buyers.

The levy imposed on buyers at one per cent of sale was sending buyers to Rwanda, Tanzania and Uganda, he said.

advertisement