Tea farmers are all smiles after prices at the auction recorded an eight percent increase towards the end of the month of April to 219 shillings for a kilogram from 203 shillings that was retailing as the month began
According to a market report by the East Africa Tea Traders Association (Eatta), the price of tea started at 215 shillings per kilogram the first sale of 2019 before taking a downward trend to touch a four-year low of 193 shillings early this month.
However, prices have been rebounding in the last two sales as volumes offered for sale at the auction declined.
The volumes have been coming down in the last three months as the drought that ravaged the country in the first quarter of the year cut the supply of green leaf to the factories.
Over 40,000 employees working in tea factories have been forced to go on advance leave as tea production in the factories plummeted by half but there is hope as the long rains are finally here and production is expected to increase.
Kenya Tea Growers Association (KTGA) said harsh climatic conditions have forced factories to operate three to four days a week, significantly cutting down on output. According to KTGA, it will take another six to eight weeks for the crop to recover when it starts raining, pointing out that the industry performance for 2019 will be poor than any other time.
The Tea Directorate had forecast that the volumes of the beverage will this year drop to 416 million kilos from a high of 474 million kilos last year.
The decline, said the directorate, will see the average auction price surge to Sh280 a kilo up from Sh260 achieved in 2018.
Following a continued decline in prices, the Kenya Tea Development Agency (KTDA) had already warned farmers to brace for long earnings this year as the beverage recorded a 17 percent decline in price during the first half of 2018/2019 financial year.
Tea is the largest employer in the rural economy and contributes highly to the social and economic sustainability of the counties where it is grown.
The commodity is a major foreign exchange earner and last year brought in Sh140 billion, which was one of the impressive performances in recent years.
The Kenya Tea Development Agency (KTDA) has already warned farmers of low earnings this year following a decline of 17 percent in the price of the beverage in the first half of 2018/2019 financial year.