Kenya Tea Development Agency (KTDA) has warned farmers to brace for low earnings this year.
This follows a 17 per cent drop in the price of the beverage in the first half of the 2018/2019 financial year.
KTDA said indications point to a continued weakening of prices which could significantly affect farmers’ earnings.
“Farmers should expect lower earnings for the year should this price drop continue. There is still a lot of stock within the global tea supply chain, which is lowering prices. It is an issue of supply and demand and its effect on price,”said KTDA Group CEO, Lerionka Tiampati.
High volumes pushed down the average price of KTDA tea to Sh271 per kilogram in the first half of the review period, from Sh327 for the corresponding half of 2017/18.
According to records, the price is the lowest witnessed by the agency in the last five years.
Good weather spurred the rise in green leaf production by 4.4 per cent, to 611 million kilos between July and December 2018
Sustainable agricultural practices such as fertilizer application are said to have also improved the quality and quantity of green leaf
KTDA also said tea producing countries such as India and Malawi also reported higher yields in 2018, adding to global stocks which pushed prices down.
Kenyan farmers earned a record Sh85.74 billion riding on a bumper harvest in the last season, defying the fall in global prices and marking the third year of improved earnings.