STiR coffee and tea magazine

48 STiR coffee and tea | 2024 Issue 5 (October / November) West: Kericho, Nandi, Bomet, Kisii/Nyamira East: Nyeri, Kiambu, Central Kenya Source: Tea Board of Kenya Kenya's Major Tea Producing Regions Tea Production 2023 Total | 534 m kgs West |360 m kgs East | 174 m kgs Eastern 5-10% Rift Valley 25-30% Nyanza 10-15% Central East of Rift 35-40% West of Rift 60-65% According to the Central Bank of Kenya, the total was boosted by a decline in the local currency, which traded as low as 160 shillings per US dollar. The Kenya Union of Tea Owners (KUTO) recently an- nounced, "This year, we are optimistic of paying over 80 shil- lings per kilogram in October 2024." The payment combines monthly payments and the annual bonus from last year's har- vest. KTDA National Chairman Enos Njeru said that going for- ward, monthly pay plus bonus could increase to 100 shillings per kilo. The announcement brought lively praise from growers on the union's Facebook page. Sales are mainly bulk black teas for blending. Only 5% of the tea grown in Kenya is blended and packed to add value. President William Ruto set a target of 50% for value-added tea exports by 2027. Deputy President Rigathi Gachagua said that value-addition will increase exports to $1.85 billion by 2027, boosting smallholders' earnings. Plan of Action The ministry will appoint a multi-stakeholder committee to review the pricing mechanism of tea, said Cabinet Secretary Karanja. In Mombasa, EATTA's Omuga said, "We all agreed on the following to address the high stock volumes of old teas from KTDA. First, remove the reserve price on teas older than six months. Then, review the reserve price. Tea should be of- fered at prices that meet the market," he said. Omuga adds that it is important to allow direct exports, out- lawed by the Tea Act of 2020. To draw down the surplus, "the oldest teas should be distributed to brokers to sell privately, and KTDA should engage Mombasa-based buyers to buy the teas privately at agreed prices." He said brokers will form a "quality committee" to drive the quality agenda with producers. Unregulated registration of new, independent factories must stop to mitigate high competition for green leaf, he said Omuga also described several longer-term objectives, in- cluding diversifying production into other forms of tea, such as orthodox, green, and specialty teas, to discourage overreliance on black CTC (cut, tear, curl) teas. Former KTDA Management Services Managing Director, Alfred Njagi tours the tea fields. He said brokers strongly support research and development to promote alternative uses of teas by the pharmaceutical in- dustry, the cosmetics industry for making beauty products, and beverage distributors and bottlers of ready-to-drink teas. The tea industry should seek to partner with other innovative indus- tries, such as beer and soft drink manufacturers. Omuga said the government and the tea industry should promote stakeholder consultations in policy formulation. Establishing a committee to look into the problems of the minimum is a welcome development, agrees Njagi. "I urge the committee when formed, to review what economists have said about setting up a minimum price for a freely traded commodity and also the mechanisms of policing adherence to commensu- rate minimum tea quality standards in 140+ factories to meet the maximum price in a market-impacted by many other price influencing factors." Kenya's tea production has increased dramatically over the last few years, leading to a price decline.

• Cover