Tobacco Produce Increased by 28 Percent in Season that Ended May

Tobacco produce rose by 28 percent to 1.49 billion during the season that ended in May due to the favorable weather conditions that have been experienced since March.

According to the British American Tobacco (BAT) Kenya, produce from a total of 5,000 farmers mainly from Migori earned them about 8.8 million tonnes, a 27 percent increase from last year’s 6.9 million tonnes.

The rise in payments will come as a respite to the producers, a significant number of whom have been shifting to other crops citing lower earnings.

“It has been a very positive production year for the farmers. They met our forecasts for the crop with the good rains this year,” said BAT Chief Executive Beverley Spencer-Obatoyinbo.

Last year, the payments had fallen to a four-year low of Sh1.16 billion due to a combination of drought and floods that hit the quantity and quality of the tobacco.

BAT said as a result, up to 2,210 contracted farmers in western, Nyanza and eastern Kenya whose crop was affected by harsh weather received 79.5 million shillings in compensation for crop losses.

Net profit for the half-year to June 2018 rose by 3.4 percent to 2 billion shillings compared to 1.94 billion shillings a year earlier as sales jumped 1.93 percent to 17.4 billion shillings.

Shareholders have been paid an interim dividend of 3.50 shillings per share, unchanged from the same period in 2017.

The firm has, however, been experiencing a tougher operating environment due to tighter regulatory controls and a rise in excise duty.