KTDA pays second best tea price as Sri Lanka leads

The Kenya Tea Development Agency (KTDA) had the second best price in the world market as low earnings in 2019/20 financial year saw Sri Lanka dislodge it from the top position that it held last year.

The tea industry report released last week indicates that KTDA, which manages small-scale farmers, paid an average of Sh41.27 per kilogramme against Sri Lanka’s Sh48.72 for the same quantity.

Both countries, however, recorded a decline in prices compared with the previous financial year. KTDA had paid Sh52 per kilo last year while farmers in Sri Lanka earned Sh51.

“With all the challenges, we remained at the top in payment of our farmers, emerging number two in the world market,” said KTDA managing director Lerionka Tiampati.

Farmers affiliated to KTDA earned Sh69.7 billion in the review period compared with Sh85.7 billion that they got pocketed year.

KTDA has attributed the decline to low international prices during the review period following a glut and increased cost of production.

“This performance has been realised at a time when most of tea producing countries have registered increased production,” said Mr Tiampati last week.

In Africa, Rwanda, Burundi, Tanzania Malawi and Uganda came in at position six, nine 10 and 11 respectively.

Kolkata Tea Auction in India emerged the best trading centre for black CTC brand in the world with the payment of an average price of Sh264 per kilo followed by Mombasa at Sh244.

Colombo auction, which mainly trades in orthodox tea fetched Sh335 per kilo. These speciality tea fetches premium price and Kenya has over the years been diversifying to this variety to cut overreliance on the black CTC.

Sri Lanka is the leading producer of tea in the world and consumes almost its total output, a move that has helped the country to overcome price volatility at the world market. On the other hand, Kenya exports 96 percent of its tea, hence the cost is determined by the global trending price.

Efforts by Tea Directorate to have Kenyans consume more tea have not been fruitful over the years with the figure stagnating at a paltry four percent.