Prices at the Mombasa Tea auction have dropped by 34.7 per cent for the last five months, Kenya Tea Development Agency (KTDA) has said. It is feared the fall in prices will affect farmers’ annual earnings. KTDA Chief executive Lerionka Tiampati said a kilo of made tea attracted an average price of Sh204.68 ($2.38) between July and November 2013 compared to Sh313.90 ($3.65) in the same period last year. In some weeks, he added, prices have gone down below Sh176.30 ($2.05), the lowest recorded per kilo in October 2008. “Since July tea prices have decreased by over 30 per cent, a situation we fear will impact negatively on the growers’ earnings in the current production year,” said Tiampati. He said that the drop in prices has been occasioned by increased supply of tea in the market and favourable weather.
Between January and September this year, over 60 million kg of made tea from the East African region have been sold through the auction and of this amount, a huge percentage was from Kenya. Speaking during this year’s KTDA directors’ conference in Nairobi, Agriculture Cabinet Secretary, Felix Koskei said the Government is aware of bottlenecks affecting the tea industry and is partnering with stakeholders to overcome them. He said a task force has been formed to look into the issue of Ad Valorem tax among other issues and the government shall respond adequately once we have analysed its recommendations. “On tea hawking, the law is very clear that it is illegal. We will communicate with the county governments to immediately enforce the law,” added Koskei. KTDA Chairman, Mr Peter Kanyago said besides the low prices, tea business is becoming costly owing to the levying of the 1 per cent ad valorem tax imposed by the Government. He said the tax charged is high, making local tea less competitive.
Source: standardmedia.co.ke/business/article/2000100396/tea-market-price-fall-raises-earnings-fear
