Factory directors from the 71 KTDA-managed factories will this month start meetings to review and approve the factories’ annual accounts for the 2022–23 financial year.
This is ahead of the declaration of the second and final bonus payment to farmers in October, where the meeting will determine the second payment that will run from September 11 to 22, followed by a formal declaration of the second payment rates.
In a press release yesterday by the Kenya Tea Development Authority (KTDA), the meetings come as preliminary data shows a marginal drop in green leaf production and sale prices at the tea auction in Mombasa.
KTDA Management Services, MD Mr. Julius Onguso said that green leaf delivered to KTDA-managed factories in the year ending June 2023 dropped 8.5 per cent to 1.146 billion kilos as tea farmers grappled with a prolonged drought that hit farm output.
The amount is a drop from the 1.253 billion kilos delivered by farmers the previous year.
Tea prices at the auction also recorded a slight dip of 3 per cent with the average price for all KTDA-managed factories standing at Sh 393.1 (USD 2.69) (year 2022-23) compared to Sh 404.2 (USD 2.76) a year earlier.
“The directors will be meeting to discuss the performance of their respective factories’ for the year that ended in June. It is only after that they will announce the second payment rates for their specific factories,” Onguso said.
He further noted the agency has braved a tough year in the markets as the main buyers like Pakistan and Egypt battled a crippling US dollar shortage, which significantly affected sales.
“We have had the twin challenges of a severe drought and a very challenging global tea market due to lack of access to the US dollar by key tea buying markets, but we are continuously working to make sure farmers get the best value for their hard work,” Onguso added.
Kenya experienced a severe drought within the financial year (June 2022–July 2023), which led to reduced green leaf output in the farms.
According to the MD, the agency continues to put in place measures such as aggressive cost-cutting, exploring alternative energy sources, and diversifying into different tea types to cushion farmers from adverse climatic and market changes.
“The measures already in place include investment in small hydropower stations for cheaper power supply as well as installing solar power farms within the factories,” he said.
Onguso noted that eleven factories have also set up orthodox tea processing lines to reduce reliance on Black CTC teas, and more than five others are in different stages of establishing orthodox processing facilities.
The KTDA Foundation is further training farmers on income diversification and management by establishing alternative income sources through rearing livestock and setting up varied businesses like agro-vets, posho mills, soap making, and beekeeping, among others.
In January this year, the Kenya Tea Development Agency (KTDA) released a Sh.5.5 billion bonus payment for the half year ended December 2022 to smallholder farmers affiliated with its factories.
By Wangari Ndirangu