Sasini’s crop purchase from farmers grows by 91pc to Sh3.9bn

Sasini PLC invited guests and shareholders during the Sasini Plc investor briefing at the Nairobi Serena Hotel on January 26, 2023.

Photo credit: File | Nation Media Group

Sasini bought Sh3.98 billion worth of produce including coffee from farmers in the year ended September, nearly doubling from purchases worth Sh2.09 billion a year earlier.

The Nairobi Securities Exchange (NSE) listed firm disclosed the transaction with farmers in its latest annual report which shows it also bought tea, avocado and macadamia.

Sasini and other agricultural companies grow their own produce which they supplement by buying from farmers most of whom are based in foreign markets including Europe.

Sasini more than doubled its coffee purchases from farmers to Sh2.5 billion from Sh913.6 million in the previous year, making its largest profit from trading the commodity as most other business lines including its own coffee milling posted losses.

The company sold the coffee it had bought from farmers for Sh3.3 billion in the review period, up from Sh1.3 billion the year before.

“Coffee production volume was flat at 564 tonnes against the prior year’s 565 tonnes due to favourable conditions. Coffee sales were buoyed by the coffee trading division which generated the highest ever profits in its operation,” Sasini said in the report.

The company’s purchase of coffee from farmers rose to 3,934 tonnes from 1,713 tonnes while coffee trading sales by volume jumped to 4,229 tonnes from 1,696 tonnes.

The performance of the business was helped by higher prices of the commodity which rose to Sh653 from Sh581 for each kilogramme.

The overall coffee business posted a pre-tax loss of Sh234.5 million, reversing a pre-tax profit of Sh76.1 million in the prior year.

Sasini’s tea purchases from farmers rose to 1.06 billion from Sh890.8 million, with the company saying it recorded lower sales due to a glut in the market.

Sasini obtained a price per kilogramme of Sh222 for its tea in the review period, down from Sh264 the year before.

“Teas sold during the year was 12.05 million kilos against the prior year’s 12.8 million kilos on account of glut in the market,” the company said, adding that there were unsold tea stocks worth Sh320.26 million as of September 2024.

“The small-scale farmers especially from the west of the Rift Valley region have been enduring slow uptake of their black tea as their marketing agency insisted on these teas being bought at not below the $2.5 per kg level,” Sasini said.

“This has resulted in tea being produced and not sold for a long period of time. Consequently, there was way too much black tea available in the auction from January 2024, resulting in a collapse of the auction prices which persisted for the full year.”

The tea business made a pre-tax loss of Sh258.3 million, reversing a pre-tax profit of Sh712.5 million.

Sasini’s purchase of macadamia from farmers rose to Sh246 million from Sh136.7 million while those of avocado shrunk to Sh128.1 million from Sh148.9 million.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.