The Kenya Tea Development Agency (KTDA) has set its eyes on new markets abroad to boost profits.
The agency, which represents about 500,000 small tea farmers, has established the markets in Germany, UK and Russia.
KTDA chair Peter Kanyago (pictured) said the move was targeted to expand market for the Orthodox variety tea.
Up to 11 tea factories have been earmarked to process the variety.
Gitugi, Itumbi, Imenti, Kangaita, Micii Mikuru, Thomaita and Kiru tea factories are already processing the variety, while Chinga, Kague, Kimunye and Mutigo are set to start by the end of the year.
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The factories aim to produce 6,000kg of the orthodox tea.
This comes after the sector recorded a drastic drop in production and sales following drought in March and April.
“The crop production dropped by 2.5 per cent compared to the previous year,” said Mr Kanyago.
The chairperson noted that the Sudan markets dropped due to political instability in the country, adding that sanctions by America in Iran also affected tea business.
“Iran are willing to buy our tea but they don’t have dollars to sell tea to America,” he said.
The agency will, however, not increase payment from Sh15 per kilogramme to Sh20 as ordered by agriculture Cabinet Secretary Mwangi Kiunjuri. Instead, they raised prices to Sh16 per kilo.
Separately, tea farmers in Embu County will earn a lesser bonus this year compared to the last year’s.
Mungania Tea Factory chairman Julius Munthungu said this was due to increased tea production against a constant demand.
Mr Munthungu said about 200 million kilogrammes of processed tea from last year’s production had not been sold. “Until the extra 200 million kilogrammes are purchased, low prices for tea will continue,” he said.
Munthungu said whereas the 2017/18 bonus was good for farmers - at Sh65.10 per kilogramme - this year they “foresee a drop, but not too low to discourage framers”.
He said the quantity of tea in the world was progressively increasing, as more acreage was put under the crop while the market for the beverage had not grown to commensurate levels.
The chairman explained that each kilo of processed (black) tea was made of four and a half kilos of green leaves, hence the disparities between the price of kilogramme of tea sold at the auction at Sh350, and the near Sh65 that a farmer pocketed for a kilo of green leaves at factory.
