Strong dollar sweetens earnings for tea farmers

Corporate News

A woman picks tea leaves for delivery to the factory. Small scale tea farmers are set to enjoy a 21 per cent jump in total earnings this year. FILE PHOTO 

By GERALD ANDAE

In Summary

• “Our performance this year has improved from last year, mainly because of the strong dollar and good market prices globally,” said the Kenya Tea Development Agency (KTDA) managing director Lerionka Tiampati.
• The balance will now be released as second payment, commonly referred to as ‘bonus’, and will be paid out in October.

Small scale tea farmers are set to enjoy a 21 per cent jump in total earnings this year compared to 2014 helped by a strong dollar and improved tea prices.

The total earnings for the 2014/2015 financial year rose to Sh63.6 billion from Sh52.6 billion earned in the 2013/2014 financial year. 

READ: Tea price uptick offers hope for farmers after poor 2014

Out of the Sh63.6 billion, Sh43.25 billion will be paid out to smallholder tea farmers as bonuses.

“Our performance this year has improved from last year, mainly because of the strong dollar and good market prices globally,” said the Kenya Tea Development Agency (KTDA) managing director Lerionka Tiampati.

KTDA said Sh14.55 billion has already been paid out monthly to farmers as initial payment, based on monthly green leaf deliveries to factories, at the rate of Sh14 per kg of green leaf.

OCTOBER

The balance will now be released as second payment, commonly referred to as ‘bonus’, and will be paid out in October.

The ‘bonus’ will be paid at an average rate of Sh27.61 per kg of green leaf, representing a 56.8 per cent increase over the 2013-2014 average rate of Sh17.61 per kg of green leaf.

Mr Tiampati also attributed the growth in revenue to a decline in volumes of tea sold globally, which supported demand for the beverage.

A total of 240 million kilograms of made tea was produced from 1.039 billion kilograms of green leaf delivered to the factories during the financial year under review, compared to a total of 256 million kilograms of made tea from 1.124 billion kilograms of the tea leaves the previous year.