Low prices a blow to tea farmers in Kenya

Kenya saw its tea harvests increase during 2012-13, with revenues higher by 12.7% compared to the previous year. For small-scale farmers, increased output would mean higher earnings as well. But this year, it isn’t going to happen.

Farmers expect to receive their bonuses in April, but chances are not many will be happy. The Kenya Tea Development Agency (KTDA) announced that bonuses will be smaller this year as a result of oversupply and lower prices in the global market.

The KTDA said profits hit Sh 69 billlion, or grew by 12.7% over the same period the year before. Farmers were able to deliver some 1.1 billion kilogrammes of green leaf to 66 factories managed by the KTDA, versus 907 million kg the previous year. This is equivalent to 258 million kg of made tea as compared to 211 million kg the previous year.

However, political tension in some markets such as Egypt and Syria, and depreciation of Pakistan’s currency are contributing to a surplus and lower tea prices. These issues will affect farmers earnings this year, according to KTDA chairman Peter Kanyago.

Meanwhile, KTDA CEO Lerionka Tiampati added that despite this unexpected turn of events, KTDA farmers remain amongst the best paid in the world. Moreover, he reminded local tea factories to step up compliance with international standards since customers are also elevating their quality standards. To help its farmers, the agency is working to reduce the effects of these setbacks.