Oversupply sees drop in earnings for tea farmers

Monday October 7 2019

The decline in tea earnings was felt across the region with prices averaging $2 per kilogramme. PHOTO | FILE | NATION MEDIA GROUP

The decline in tea earnings was felt across the region with prices averaging $2 per kilogramme. PHOTO | FILE | NATION MEDIA GROUP 

NJIRAINI MUCHIRA
By NJIRAINI MUCHIRA
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Earnings for small-scale tea farmers in Kenya declined by 18.6 per cent following an oversupply in the global market, which caused a significant drop in international prices.

“There was a huge increase in production leading to a supply of about 200 million kilogrammes. This had an impact on the global prices and has resulted in reduced income for our factories,” said Lerionka Tiampati, Kenya Tea Development Agency (KTDA) managing director.

During the year, global tea production stood at 5.8 billion kilogrammes against a demand of 5.6 billion kilogrammes, resulting in a 200 million kilogrammes surplus.

KTDA said last week on Thursday that income for the year ended June stood at Ksh69.7 billion ($7.1 billion) compared with Kh85.7 billion ($8.8 billion) the previous year. Farmers will therefore get paid $41.2 per kilogramme of delivered green leaf, down from $52.8 per kilogramme last year.

The decline in earnings was felt across the region and prices averaged $2 per kilogramme for the five EAC countries at the Mombasa tea auction. This represented a significant decline from $3 per kilogramme last year.

Rwanda’s tea attracted the best price of $2.68 followed by Kenya at $2.59, Burundi $2.21, Tanzania $1.36 and Uganda $1.21.

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Mr Tiampati said that despite the huge decline, earnings for farmers was better compared with other tea producing countries and was only second to Sri Lanka where farmers earned $48.7 per kilogramme down from $51.2 per kilogramme last year.

In Rwanda, farmers are set to earn $25.9 per kilogramme down from $26.9; in Burundi $15 from $16.2 and in Uganda $11.5 down from $13. It is only in Tanzania where farmers will see an increase in earnings to $14.1 per kilogramme up from $13.8 per kilogramme in 2018.

During the year, small-scale farmers in Kenya led in tea production at 481.3 million kilogrammes followed by Uganda at 61.4 million, Tanzania at 36.8 million, Rwanda at 30.4 million and Burundi at 9.1 million.

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