Connect with us

Hi, what are you looking for?

Capital Business
Capital Business
The tea farmers elect one-third of factory company directors on rotation and the candidates are subject to the nomination process according to Company Act 2015/FILE


Kenya tea earnings likely to decline in 2017

“While there are still a few months remaining in the year, there is a slim likelihood that we shall beat last year’s record,” said Kanyago/FILE

NAIROBI, Kenya, Feb 19 – Kenya’s tea earnings for the 2016/2017 financial year are likely to drop following prolonged dry spells that led to depressed tea output.

Kenya Tea Development Agency Holdings Chairman, Peter Kanyago, said that global tea prices have remained relatively low compared to the previous year leading to reduced net earnings.

“While there are still a few months remaining in the year, there is a slim likelihood that we shall beat last year’s record,” said Kanyago at this year’s induction for newly elected directors, however observed that the tea business is cyclical in nature.

“One year could be great, the next is depressed,” he stated.

He called on directors to ensure continuous farmer education, especially on sustainable agriculture and financial management to ensure farmers are experiencing growth year on year.

During the 2015/2016 financial year, farmers took home Sh44.72 billion in second payment, an average of Sh36.26 per kilo of green leaf compared to Sh27.61 paid out the previous year.

Kanyago said challenges such as high cost of production, fluctuating exchange rates and auction prices, declining individual holdings and high cost of credit continued to impact farmers, factory companies and KTDA itself negatively.

He attributed the tea industry’s success to the unique KTDA structure, which has acted as a buffer against external political interference.

“All 560,000 small holder farmers working together under the KTDA umbrella has given us a lot of leeway in negotiation both locally and globally. Fundamentally, through the KTDA arrangement, our farmers enjoy economies of scale and shield each other against economic and political shocks,” stated Kanyago.

He urged the newly elected directors to jealously guard the gem that is KTDA from those agitating for its split or reversal to the government. Without KTDA, he observed, there can be no small holder tea industry.

Advertisement. Scroll to continue reading.

For his part, KTDA chief executive, Lerionka Tiampati, asked the directors to offer effective leadership adding that the management team will work with them to efficiently manage factory companies on behalf of the shareholders.

“Farmers need leadership. They want to know that the person they have elected to lead them is fair, just, courageous, knowledgeable, energetic, present and a perpetual team player,” he said.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...