KTDA imports Sh9bn fertiliser, asks state for subsidy funds
Kenya Tea Development Agency (KTDA) chairman David Muni Ichoho
Some 650,000 tea farmers who own 54 factories across the country will benefit from a Sh9 billion consignment of fertiliser imported by the Kenya Tea Development Authority (KTDA).
A vessel carrying 47,000 tonnes of fertiliser (820,000 50kg bags) docked at the Port of Mombasa on Saturday while a second ship with 41,000 tonnes was expected last evening.
“There was shortage of NPK fertiliser, which is specialised for tea, ahead of planting season set for September,” said KTDA chairman David Ichoho.
He said KTDA has urged the government to subsidise the fertiliser and they are hopeful the funds will be released.
The local price of fertiliser, which has been pushed by rising international prices, is Sh4,200 for a 50kg bag. This is a 54 per cent increase compared to the previous season. With subsidy, it will cost about Sh3,500 per bag.
Reforms
Tea reforms introduced subsidies to protect farmers’ earnings from low prices and high cost of production. The tea agency imports the fertiliser from Europe, mainly Russia, through the Ministry of Agriculture.
Mr Ichoho said the fertiliser will be transported via the standard gauge railway (SGR) from the port to other parts of the country under a deal between KTDA and Kenya Railways. Last year, the two institutions signed an agreement to ferry tea from Nairobi to the port of Mombasa for onward export to cut cost of transportation.
The high cost of tea production remains a major issue in the country yet prices at the Mombasa Tea Auction remain low.
Last week, about 4.13 million kilogrammes of tea were withdrawn from the floor due to low prices and security concerns over the August 9 General Election.
This is the highest amount of tea to be withdrawn this year, although traders remain optimistic that demand and activities at the auction will soon return to normalcy.
KTDA tea accounts for over 70 per cent of the total volumes traded at the auction and the lack of demand for this beverage has had a negative effect on the overall price at the floor.
More than 520 million kilogrammes of tea are sold at the auction annually.
Minimum price
The government set a minimum price of Sh240 per kilogramme after farmers declined to supply their produce due to low prices that reached Sh180/kg in July last year, almost at par with the cost of production of Sh170/kg. While setting the minimum price, the government capped the cost of producing a kilo of tea at Sh84/kg.
