KENYA – Kenya’s tea farmers are grappling with the risk of decreased earnings as the price of the beverage plunges at the weekly auction in Mombasa, compounded by quality concerns surrounding the tea provided for auction.
Despite a significant increase in production volumes attributed to favorable weather conditions in most tea-producing regions, the demand for Kenyan tea continues to decline due to weak demand from top buyers and stiff competition.
The volume of Kenyan tea presented at the auction between January and April increased 20.7 percent to 145.5 million kilogrammes.
According to data from Tea Brokers East Africa Ltd (EATBL), a kilogram of tea fetched an average price of Kes283.4 (US$2.18) during sale 14 of 2024 at the Mombasa auction, reflecting a 6.8 percent decline compared to the same period last year.
“There was reduced activity from Pakistan Packers, Bazaar, Afghanistan, Egyptian Packers, Yemen, and other Middle Eastern countries in view of the Eid-l-Fitr festivities,” said EATBL.
Additionally, the strengthening of the local currency against the dollar and the introduction of a reserve price aimed at cushioning farmer earnings have further impacted the industry.
The reserve price, introduced in 2021, has presented a huge blow for the sector, with the increasing volumes of tea at the auction failing to attract buyers.
Data from Africa Tea Brokers (ATB) revealed that out of 72.08 million kilograms of tea presented to the auction in March, only 42.35 million kilograms were sold, highlighting the challenge faced by the industry.
In response to quality concerns, the Kenya Tea Board (KTB) is developing standards for acceptable teas for processing to reduce the volume of rejected teas.
“The Tea Board of Kenya has been registering the green leaf transporters to the factory and is developing the standards of green leaf acceptable for processing,” KTB said.
Meanwhile, Kenya is implementing reforms in the agricultural sector to increase farmer income. Recently, Kenya Tea Development Agency (KTDA) ousted chairman David Ichoho following a stakeholders meeting in Kericho.
The meeting led by Deputy President Rigathi Gachagua elected a new board chair, Enos Njeru, now tasked to lead the firm that represents more than 600,000 smallholder tea farmers from 54 factories.
The senate has also tabled a tea amendment bill that seeks to amend certain provisions in the Tea Act 2020, aiming to protect tea grower’s proceeds from mismanagement by factories and also aims to encourage value addition of tea by exempting value-added tea from the payment of the tea levy
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