Earnings from tea exports in the first five months of the year increased by 28 per cent compared to the same period last year, Tea Board of Kenya has announced.
In a statement, the board said earning increased by Sh19.55 billion from Sh68.73 billion to Sh88.28 billion.
“By the end of the year, we expect export earnings to rise from Sh180.57 billion last year to Sh211.27 billion,” the board added.
“This is Sh30.70 billion more than what the industry earned in 2023.”
In terms of returns to the farmers, the board noted that the average payments to small holder tea farmers was Sh59.02 per kilogramme of greenleaf from Sh51 per kilogramme the previous year.
“By the end of the year, farmers expect to earn a minimum of Sh64 per kilogramme of greenleaf from Sh59.02,” TBK added.
The board noted that the increased yields and earnings have been as a result of several initiatives by the government.
It said in its quest to boost productivity and quality of tea as well as reduce on the cost of production, the government supported distribution of 97,974 metric tonnes of fertiliser to the tea farmers last year at a subsidised cost of Sh2,500 per 50 kilogramme bag.
It added that the government removed VAT on all teas purchased from local factories for value addition.
“This was done through the Finance Act, 2023. Further, several other incentives have been proposed in the Finance Bill, 2024,” it said.
TBK further noted that in May, 2024, the government launched China-Kenya tea trade centre in Fujian province in China to facilitate distribution of Kenya tea in China.
“The first consignment under this arrangement is expected to be shipped by end of this month (700 packages). By the end of December, we expect to have shipped one million kilogrammes of Orthodox teas under this arrangement,” he board revealed.
It said plans are underway to establish warehousing facilities for value added tea in the target markets (specifically Ghana; DRC Congo and UAE) to ease distribution of value-added teas.
TBK noted that Kenya Tea Development Authority will be launching Chai Gold on June 19 as a national brand for the country to the international market in line with the directive issued by President William Ruto on branding of the Kenyan tea to drive value addition.
To boost market access in Pakistan, the biggest market for Kenya tea, the board noted that the government negotiated with Pakistani authorities early last year for prioritisation of forex allocation to facilitate importation of tea by Pakistan tea traders.