Limuru Tea dips into loss as prices fall

Limuru Tea has plunged into full-year loss on falling tea prices that offset an increase in green leaf volumes.

The company has reported a Sh331 million loss compared to a net profit of Sh28.5 million the previous year, with revenues for the year dipping 11 per cent to Sh92 million.

The firm has valued its tea plantation at Sh196.7 million—down from Sh201.7 million—offsetting any benefit the 14 per cent increase in green leaf volumes to 3.4 million kilos made.

“The decrease in pretax profit is largely attributed to the reduced tea auction prices and the loss on revaluation of biological assets in line with the declining tea prices,” the company said, adding that prices last year fell 16 per cent to Sh180 per kilogramme.

Tea prices have for the past two years plummeted on increased volumes, significantly reducing small farmers’ bonus earnings to Sh15.8 billion last year, the lowest in the past five years.

READ: Low tea prices, dry weather hit shares of agriculture companies

Prices of the commodity have however been increasing since the beginning of this year, raising hopes for farmers including Limuru Tea. Mid last month, tea prices at the Mombasa auction hit a one-year high as severe drought took a toll on the volumes.