Tea export earnings rose by Sh33.28 billion in the year ended June 2024, new data shows, driven by increased production of the green leaf following heavy rains that were received during the period.
Data from the Kenya National Bureau of Statistics (KNBS) shows that the value of tea exports reached Sh203.71 billion in the 2023/24 financial year.
This represents a 19.52 percent increase in earnings compared to the Sh170.43 billion earned from tea exports in the year ended June 2023.
The increase in earnings was driven by a steady growth in export volumes, which hit 608,296 tonnes compared to 547,690 tonnes exported in the previous year.
Most of the tea produced in Kenya is exported, mainly to Pakistan. Demand for the beverage is also high in Europe, the Middle East, and Asia.
Export include tea from factories managed by the Kenya Tea Development Agency (KTDA), large-scale factories, medium-scale factories and speciality factories.
KTDA manages 72 factories owned by more than 650,000 smallholder farmers spread across 16 tea-producing counties, according to data from the Tea Board of Kenya (TBK).
Multinationals such as Ekaterra Tea, Finlays, Williamson Tea, and Eastern Produce Kenya also produce large quantities of tea grown on large plantations.
Tea sellers are usually paid by buyers in US dollars.
Last year, tea farmers enjoyed higher earnings that were driven by an increase in export volumes and a weak shilling.
When the Kenyan shilling depreciates against the US dollar, exporters' earnings in local currency terms increase. Tea exporters will, however, not enjoy this luxury in the year that ended in June 2024.
This is because while the shilling depreciated sharply against the US dollar in the first half of the financial year, these gains were largely wiped out in the second half of the year as the local currency staged a major comeback against the greenback.
KTDA is expected to announce the much-awaited tea bonus to farmers for the year ended June 2024 at any time. As a matter of policy, the KTDA pays at least 30 percent of its earnings to tea farmers as a bonus.
Besides the bonus, the farmers are usually paid monthly for tea deliveries to enable them to cater for their spending needs, including purchasing inputs.
Last year, KTDA paid a record bonus of Sh44.15 billion. Total payments to farmers during that year totalled Sh67.7 billion, inclusive of the monthly payments.
This, however, comes at a time when chaos has erupted at some tea factories in recent weeks, with some farmers protesting against low payments from their factories.
The KTDA says it has no control over the final payment that factories under its management make to their farmers.
“Teas from different factories attract different buyers and the price offering is different and this has an impact on the final payments. Different factories have different operational costs, which also determine the final payments,” said KTDA.
