Smallholder Tea Factories ends second payment for tea farmers.


Smallholder tea factories have announced second payment rates (bonuses) for farmers for the financial year ending June 2021 covering the period July 1, 2020, to June 30, 2021.

This follows meetings by factory directors from the 54 KTDA-managed factories that were held between 20th September and 1st October to review the audited 12 months accounts of their factories and declare the second payment rate.

“Factory directors have fulfilled their mandate to review the performance of their companies over the 12 months and declare the second payment rates. The factories have already directly communicated to their farmers about these rates. Generally, the rate per kilo does not vary much from those of the previous financial year, ” said David Ichoho, KTDA Holdings Chairman.

“Farmers will receive this payment in their accounts at the end of October 2021,” he added

The second payment declarations come against a backdrop of a 8.3 percent drop in CTC tea prices at the Mombasa Tea Auction from an average of US$ 2.38 last financial year (2019-2020) to US$ 2.18 in the 2020-2021 financial year ending 30th June 2021.

During the financial year under review, farmers delivered 1.25 billion kilos of green leaf to factories during the year, a 14% drop from the record production of 1.45 billion kgs in the previous year (July 2019 to June 2020).

The relatively favorable exchange rate of the Kenya Shilling to the US dollar has however helped shore up earnings from the sale of tea, which is generally dollar-denominated.

The drop in prices in the period under review was a continuation of a downward trend witnessed since 2018 as high production over the years has seen supply outstrips demand and tea processors carrying forward unsold stocks.

The business was also disrupted by the COVID-19 pandemic that not only caused worldwide shipping and logistics challenges but also reduced demand for tea in key consuming countries.

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