Tea farmers earnings increase by 25pc

September 9, 2013
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The high volume of tea produced  was occasioned by sufficient rainfall for most parts of last year/FILE
The high volume of tea produced was occasioned by sufficient rainfall for most parts of last year/FILE
NAIROBI, Kenya, Sep 9 – Earnings by small holder tea farmers under the Kenya Tea Development Agency (KTDA) have increased by 25 percent for the period ended June 2013, with huge volumes of tea delivered to tea factories.

The small holder tea farmers delivered approximately 1.1 billion kilogrammes of green leaf to the 66 factories managed factories by KTDA against 907 million kilogrammes over the same period last year.

The high volume of tea produced was occasioned by sufficient rainfall for most parts of last year.

This has resulted in KTDA managed factories earning higher revenue of Sh69 billion up from Sh61 billion earned in 2011/12 financial year.

This means the gross revenue to the sector has gone up, with better revenues for farmers compared to the previous year.

Despite this, the rate payable to farmers per kilogramme of made tea per factory is projected to drop by about 10 percent in the 2012/13 financial year.

This is because the global tea market for Black CTC (Crush, Tear, Curl ) teas was generally depressed, driven by high volumes and volatile market dynamics.

The exchange rates, though stable at a mean rate of about Sh85 (compared to mean of Sh89 in last financial) to the dollar, also impacted negatively on the total revenues earned from the sale of tea.

KTDA (Holdings) Chief Executive Officer Lerionka Tiampati said the small scale tea sub-sector has also been adversely affected by the high cost of energy, labour and production.

“The small scale tea sub-sector in Kenya has not been spared from the global market dynamics, but the high volumes delivered mean that farmers will even out,” he said.

Tiampati added that logistical problems associated with the Mombasa Port and enforcement of the axle load limits also impacted on the overall tea prices.

The tea industry in general also suffered from a slowdown owing to anxiety caused by the 2013 General Election.

Transporters feared collecting manufactured teas from the factories, with the supply high and little demand.

“The political crisis in Egypt later in the year also affected overall tea sales, eroding gains that were achieved in the first two months of the year,” he said.

The new 2013/2014 financial year has also started on a low note, with the sub-sector witnessing depressed earnings at the Mombasa Tea Auction.

“This seems to continue for the better part of the year and is likely to impact on the next earnings if the situation does not change, “Tiampati said.

KTDA manages 66 tea processing factories, which are owned by 54 Tea Factory Companies.

The Agency also Manages 2 factories in Rwanda.

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