KTDA Blames Bonus Decline on Global Tea Market Trends, Currency Fluctuations

Key Highlights

• Over 680,000 smallholder tea farmers to receive lower 2025 bonuses compared to last year.
• KTDA cites a weaker exchange rate and global market shifts as main causes.
• West Rift counties recorded the sharpest drops, with Kericho, Bomet, Nyamira, Kisii, Nandi, and Vihiga hardest hit.
• East Rift counties fared better, with smaller declines of between Sh34–Sh46 per kilo.
• Teas from high-altitude regions in Central Kenya fetched premium prices despite the dip.
• KTDA urges farmers to focus on quality and efficiency, while rolling out plans for orthodox tea production, value addition, and market diversification.
• The agency warned against politicizing the tea sector, stressing systemic global challenges.

The Kenya Tea Development Agency (KTDA) has linked this year’s reduced bonuses for more than 680,000 tea farmers to unfavorable global market conditions and currency fluctuations.

In a statement, KTDA explained that the Kenya Shilling’s weaker exchange rate against the US dollar significantly eroded earnings, even when international tea prices remained stable. While the shilling traded at an average of Sh144 to the dollar in 2024, this year’s rate averaged Sh129, cutting into farmers’ final payout.

“The drop in earnings is mainly attributed to international market conditions and currency exchange movements that were less favourable compared to last year,” KTDA said, noting that the results were beyond its control.

Regional Impact

The sharpest declines were felt in the West Rift counties. In Kericho, the price per kilo of made tea dropped by Sh101 to Sh245, while in Bomet it fell by Sh85 to Sh209. Nyamira recorded a Sh106 drop to Sh266, Kisii a Sh95 drop to Sh246, and Nandi and Vihiga registered a Sh66 drop to Sh208.

In contrast, East Rift counties saw milder reductions. Factories in Kiambu fetched Sh371 per kilo (down by Sh46), Murang’a Sh376 (down Sh42), Nyeri Sh388 (down Sh42), Kirinyaga Sh400 (down Sh38), Embu Sh404 (down Sh34), and Meru Sh381 (down Sh46).

KTDA attributed these differences to quality and altitude factors, noting that teas from high-altitude zones naturally attract better global prices.

Nyeri Case Study

In Nyeri, farmers’ payouts ranged from Sh40 to Sh56 per kilo. At Gathuthi factory, farmers will earn Sh56 compared to Sh57 last year. Chinga farmers will receive Sh43 (a Sh7 reduction), Gitugi Sh42.50 (down Sh10.50), while Iria-ini and Ragati farmers will get Sh40, representing Sh6 and Sh5.50 drops respectively.

Despite the dip, some farmers expressed relief that the difference in Nyeri was relatively small compared to other regions. “For many factories here, the difference is less than Sh10, which is manageable compared with other zones where the drop is nearly Sh20,” said Charles Chege, a Gathuthi farmer.

Next Steps for Stability

KTDA emphasized that the solution lies in diversifying products and expanding markets. The agency is investing in orthodox tea production, promoting value addition, reducing packaging costs, and opening new markets.

It also called on farmers to maintain high-quality green leaf and adhere to good agricultural practices, while urging leaders not to politicize challenges facing the tea sector.

“The challenges we face are global and systemic, but by focusing on quality, efficiency, and innovation, we will overcome them and secure better earnings in the future,” the agency stated.