Bonus payments to Kenyan smallholder tea farmers are set to fall by 35% this year. This is following an 18.6% dip in earnings from tea to 69.77 billion shillings. The Kenya Tea Development Agency maintains that the drop in earnings was a result of a fall in global tea prices. 2019 looks set to be a low year for the tea industry. KTDA has announced that earnings from tea by the factories under its management have dipped by nearly 19% to 69.77 billion shillings from 85.74 billion shillings in 2018.
Out of the 69.7 billion shillings, farmers are set to receive 46.45 billion shillings which comprises an initial monthly payment of 17.69 billion and a second and final payment of 28.76 billion shillings. This is the lowest payment in three years.
During the year, the factories processed 1.13 billion kilos of green leaf into 262 million Kgs of made black tea which was sold at an average price of USD 2.59 compared to USD 3.14 realized the previous year, representing an 18 percent drop.
The KTDA has maintained that the drop in tea prices is purely an outcome of supply and demand in the global tea market. Tea earnings have fallen again this time by an 18% at a time when tea famers are crying foul over poor earnings and a section of legislators now calling for an overhaul of the kenya tea development agency.
This coming against the backdrop of uproar among tea farmers, with some cutting their tea bushes to turn to other higher yielding crops; a fact KTDA strongly denies.
Global tea production in 2018/2019 stands at nearly 5.7 billion kilos while demand is at 5.4 billion kilos resulting in a 200 million kilos surplus. Pakistan, Egypt, United Kingdom, the United Arab Emirates and Sudan remain Kenya’s key export destinations for black tea.
