Factory directors from the 71 KTDA-managed factories will this month commence meetings to review and approve the factories’ annual accounts for the 2022-23 financial year, ahead of the declaration of the second and final payment to farmers in October.
The meetings to determine the second payment will run from 11th to 22nd September and will be followed by a formal declaration of the second payments rates.
The meetings come as preliminary data shows a marginal drop in green leaf production and sale prices at the tea auction in Mombasa.
Green leaf delivered to KTDA-managed factories in the year ending June 2023 dropped 8.5pc 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% with the average price for all KTDA-managed factories standing at US$ 2.69 (year 2022-23) compared to US$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,” KTDA Management Services MD, Julius 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,” he added.
Kenya experienced a severe drought within the financial year (June 2022-July 2023) which led to reduced green leaf output in the farms.
The Agency however continues to put in place measures to cushion farmers from adverse climatic and market changes. These measures include aggressive cost-cutting, exploring alternative energy sources, and diversifying to different tea types.
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.
Eleven factories have also set up orthodox tea processing lines to reduce reliance on Black CTC teas. More than five others are in different stages of establishing orthodox processing facilities.
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.