The Kenya Tea Development Agency (KTDA) has announced a significant reduction in this year’s second payment, commonly known as the bonus, creating waves of concern across tea-growing regions. The agency attributed the lower earnings to a complex interplay of international market forces and a critical shift in currency exchange rates.
With the Kenyan shilling averaging Sh129 to the dollar this year compared to Sh144 last year, revenue from tea sold in dollars translated into far fewer shillings, creating a financial headwind for the entire sector. This currency shock is reflected in regional price data, where tea from areas like Kericho and Nyamira in the West of the Rift fell by over Sh100 per kilo. Even regions in the East, such as Kiambu and Meru, were not spared, seeing declines of Sh46 per kilo.
These variations in earnings were influenced by inherent quality distinctions, specific market appetites, and differing regional operational costs. Although high-altitude gardens in the East consistently produce leaves prized on the international auction floor, this does not eliminate the broader market shock.
The agency is urging farmers to look beyond political rhetoric, warning that politicizing tea operations ultimately harms those who cultivate the crop. They emphasize that the surest path to safeguarding income lies in a collective focus on producing high-quality leaf, disciplined factory management, and adherence to sound agricultural practices.
This year’s final payment, while disappointing, represents the net balance after all monthly payments to farmers and essential operational costs for processing and marketing have been settled, reflecting the harsh reality of an unforgiving global market.
Moving forward, a strategic shift is underway to diversify product lines and reduce reliance on traditional CTC teas by expanding orthodox tea production for niche, higher-value markets. Collaborative efforts with the government focus on promoting local value addition, cutting packaging costs, and unlocking new international markets, including China.
Concurrent investments in modernizing factory machinery and implementing cost-saving energy solutions are central to building a more resilient and competitive sector.
While acknowledging the profound difficulties posed by global market currents, KTDA has reaffirmed its dedication to navigating this period alongside farmers, confident that a shared focus on quality, efficiency, and innovation will pave the way for more prosperous future harvests.
