Workers pluck tea at a tea estate. Supply of tea to KTDA’s 66 factories rose 25 per cent, cushioning farmers from a drop in earnings that would have come from a dip in international tea prices. FILE
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The Kenya Tea Development (KTDA) on Monday announced a Sh8 billion increase in revenue, from Sh61 billion worth of exports earned last year.
Increase in revenue occasioned by higher supply that made up for drop in prices.
Small-scale tea farmers are set to earn a record Sh69 billion for their deliveries this year, helped by higher yields that offset a 10 per cent dip in prices at the international markets.
The Kenya Tea Development (KTDA), the umbrella marketing body for small scale farmers, announced in a statement on Monday a Sh8 billion increase in revenue, from Sh61 billion worth of exports earned last year.
Supply of tea to KTDA’s 66 factories rose 25 per cent, cushioning farmers from a drop in earnings that would have come from the dip in international tea prices.
“The global tea market for Black CTC teas was generally depressed, driven by high volumes and volatile market dynamics,” said KTDA holdings chief executive officer Lerionka Tiampati.
During the period to June 2013, farmers delivered 1.1 billion kilogrammes of green tea to KTDA factories, compared to 907 million kilogrammes delivered in 2011/2012.
Tea prices at the Mombasa auction have dropped to a five-year low due to the high supply volumes. Peter Kimanga, a tea trader at the auction, said in an interview that low prices have become a great concern to the producers.
“We have not had such low prices in the past five years and we blame the trend on high production volumes this year,” he said.
Mr Tiampati attributed the high supply volumes to good rainfall in most of the tea-growing zones. The rate payable to farmers per kilogramme of tea per factory is projected to drop by 10 per cent.
Low prices have persisted at the tea auctions, signaling harder times for farmers in the coming year.
“The situation seems to continue for the better part of the year and is likely to impact negatively on the next earnings if the state of the market does not change,” said Mr Tiampati.
The unrest in Egypt has not helped much and the sharp depreciation of the Indian Rupee has attracted buyers to the Asian nation because tea has become cheaper there compared to Kenya.
KTDA is engaged in campaigns to expand markets overseas beyond the traditional buyers with the view of improving farmers’ earnings.
“Marketing campaign for our tea is one of the issues that we discussed last week during the just concluded second African tea convention in Rwanda, which was organised by the East African Tea Trade Association,” said Mr Tiampati.
The tea industry also suffered from a slowdown owing to anxiety caused by the 2013 General Election while small scale tea farmers have been adversely affected by the high cost of energy, labour and production.
