Tea farmers will earn Sh4.36 less in the 2012/13 financial year compared to the previous year as total average payment per kilogramme of greenleaf tea.
According to figures released yesterday by Kenya Tea Development Agency ( KTDA), farmers will earn a total average rate of Sh45.65 per kilogramme of green leaf compared to the Sh50.01 they received in 2011/2012.
However, the tea agency which represents small-scale farmers saw total income increase to Sh69.21 billion compared to Sh61.4 billion recorded in the previous year. This represents a 12.7 per cent increase.
As the second payment or the bonus, farmers will get Sh5.86 less on average per kilo of greenleaf from Sh37.51 paid in 2011/2012 to Sh31.65 on the backdrop of high volumes of tea delivered to the 66 KTDA factories that affected the price of tea in the overseas markets.
While releasing the results, KTDA Chief Executive Officer Lerionka Tiampati said tea supply and demand in the global market has been increasing progressively in the last 10-years. “The average Mombasa auction tea prices for 2012/13 were increased slightly to $3.19 compared with $3.18 in the previous year,” said Tiampati.
Average net selling price per kilogramme decreased to Sh272.08 from Sh278.08 in 2012, representing a 2 per cent decrease attributable mainly to a stronger Kenya Shilling this year. The shilling is trading at Sh85 to the dollar compared to the same period in the previous year, which was Sh89 to the dollar.
“We have witnessed low prices at the auction mainly due to oversupply of tea in the market, a volatile political environment in some of the key export markets like Egypt and Syria and a depreciating currency in Pakistan,” he added.
Despite this, he said KTDA farmers continue to be among the best paid growers in the world. He said farmers will still receive high prices as supply is expected to decrease by 10 per cent in the coming production year. Global supply of tea has increased from 4.3 billion kilogrammes in 2011/12 to 4.7 billion kilogrammes in 2012/13 production year.
During the same period consumption increased from 4.3 billion kilogrammes against 4.5 billion. Tea farmers this year will earn a total of Sh35.6 billion as bonus at an average rate of Sh31.65 per kilo of green leaf against Sh33.9 billion earned in the 2011/12 financial year. This represents a 5 per cent increase. As a result, growers will be paid an average of Sh31.65 per kilo across most of the KTDA managed factories starting October this year.
Tiampati noted that even though the farmers’ average price has decreased, all the regions recorded an increase in terms of gross earnings. For example, in Kericho and Bomet region, Sh10.8 billion will be in circulation compared to Sh9.81billion paid in the previous year. Farmers in Kiambu and Thika region will receive Sh10.28 billion compared to Sh8.72billion representing an 18 per cent increase. In Kirinyaga, Embu, Kisii and Nyamira they will receive Sh7.8billion from a previous Sh7.07 billion.
The industry, he said continued to experience challenges which are hurting farmers’ payment, for example, high cost of energy, fluctuating foreign exchange rates and global tea prices. Other factors are climate change and rising costs of production due to VAT on farm inputs, the railway levy and increasing fuel prices. He said the agency has set up strategies to mitigate these challenges through business and market diversification.
Source: standardmedia.co.ke/?articleID=2000093864&story_title=tea-farmers-bonus-drops-by-sh6-per-kilo/
Tea farmers’ bonus drops by Sh6 per kilo
