RETURNS

Tea farmers enjoy high auction prices as year ends

This week, a kilo fetched $2.39 (Sh270.19 ).

In Summary

•For the past three and a half months, a kilo has averaged $2.20 (about Sh 248.49) with the highest being three weeks ago when it fetched $2.49 (Sh 281.49).

•It has retailed at above the preferred two-dollar mark for the 12 weeks alone this year, averaging $1.70 (Sh192.19) for the better part of the first half of the year.

Farmers at a tea collection point in Chepilat, Nyamira/FILE
Farmers at a tea collection point in Chepilat, Nyamira/FILE

Tea farmers have a reason to smile as the year ends with better prices at the weekly auction, after a dismal performance in the first half.

For the past three and a half months, a kilo has averaged $2.20 (about Sh 248.49) with the highest being three weeks ago when it fetched $2.49 (Sh 281.49).

This week, a kilo fetched $2.39 (Sh270.19 ) a slight drop from $2.44 (Sh275.84) last week.

It has retailed at above the two-dollar mark for the 12 straight weeks this year, averaging $1.70 (Sh192.19) for the better part of the first half of the year.

A rebound means better earnings for farmers whom have been at the centre of conversation, with government initiating a number of reforms to better the prices.

This includes the introduction a market reserve price of $2.43 per kilo of made tea in July and holding back of excess stocks, informed by a deteriorating market that had seen selling prices nearly slip below the cost of production.

“We are encouraged by the improved prices at the auction, which means farmers are likely to earn significantly better returns this financial year,” KTDA Holdings chairman David Ichoho said.

Yesterday, a general demand prevailed for the 180,265 packages (11,743,428 kilos) available for sale with 138,827 packages (9,156,564 kilos) being sold.

About 23 per cent of the packages remained unsold. 

“Egyptian Packers lent more and strong support and were dominant while Pakistan Packers showed useful inquiry with Yemen, other Middle Eastern countries and UK active,” EATTA managing director Edward Mudibo said.

There was reduced interest from Kazakhstan, other CIS states, Russia, Bazaar and Sudan while Iran were less active with Afghanistan subdued, he notes.

“Local Packers showed some activity on account of price. Somalia were active at the lower end of the market,” said Mudibo.

Meanwhile, KTDA affiliated factories are working to manage the increasing cost of production through the use of more efficient machinery, the use of firewood from factory-owned plantations and through managing labour costs.

The introduction of the reserve price is one of many key changes made by the new board to improve the returns and welfare of tea farmers.

Others are increasing monthly pay and lobbying for a Sh1 billion fertiliser subsidy.

The commodity’s export got a major boost this year after Pakistan which absorbs about 40 per cent of all tea exports from Kenya , agreed to remove ’Attestation Fee’ that was charged by the Pakistan High Commission in Nairobi, a move that has made Kenyan tea competitive in the export market.

It generates over Sh130 billion annually in export earnings.