KENYA – The Kenya Tea Development Agency (KTDA) is set to announce the bonus payout rates for tea farmers as factory directors meet to review and approve the audited financial accounts for the year ending June 2024.
These meetings, scheduled between September 9 and 17, will assess the performance of various factories, with the formal declaration of bonus payouts expected to follow shortly after.
Tea farmers in Kenya receive two annual payments: a mini-bonus, which is the initial payout, and the second, larger payment, commonly referred to as the bonus.
This year’s bonus is highly anticipated, with Kenya’s President William Ruto recently suggesting that farmers could earn a record KES70 (US$0.54) per kilogram due to government interventions aimed at boosting farmer incomes.
In 2023, the KTDA paid KES180 billion (US$1.4B) in bonuses, following a KES114 billion (US$885M) payout in 2022.
The bonus rates paid by factories are determined by several factors, including the income for the year, the quality of tea leaves delivered, production costs, and the average price the factory secured in the market.
The current rate for green leaves is KES21.5 (US$0.17) per kilo, an increase from KES20 (US$0.16) per kilo last year.
The tea industry, a vital component of Kenya’s economy, achieved record export earnings in 2023, amounting to KES180.57 billion (US$1.4B), a significant rise from KES138.09 billion (US$1B) in 2022.
According to the Kenya Tea Industry performance highlights for 2023, an additional KES16.4 billion (US$127.3M) was generated from domestic tea sales, bringing the total marketed value to KES196.97 billion (US$1.5B).
Despite increased export volumes, the Africa Trade Brokers Limited (AFBL) revealed that the average price of Kenyan tea at the Mombasa auction declined by 2.6 percent in the first eight months of 2024, from US$2.26 per kilogram in 2023 to US$2.2 in 2024.
To improve Kenya’s tea competitiveness in the global market and enhance farmer incomes, the government has introduced several initiatives.
In June, President Ruto allocated KES1 billion (US$7.76M) for the construction of two value-addition and branding centers.
Additionally, he launched the Chai Gold brand, positioning it as KTDA’s flagship product, a move aimed at strengthening tea branding efforts.
President Ruto has also urged the KTDA to modernize its facilities, automate processes, and support smaller factories in adding value and branding their teas.
These efforts are intended to position Kenyan tea as a premium global product and further increase the competitiveness of the industry.
Sign up to receive our email newsletters with the latest news updates and insights from Africa and the World HERE
