Tea farmers hope for high returns

What you need to know:

  • Agency chief executive Lerionka Tiampati said the decline will continue, potentially correcting an impending poor pay to farmers that had been forecasted earlier in the year.
  • Justice Weldon Korir in his ruling, directed competitions authority not to make any decision against tea agency with regard to an audit report that allegedly revealed massive price fixing at the Mombasa Tea Auction.
  • In its petition The Kenya Tea Development Agency told Justice Korir that according to the law the competitions authority was duty-bound to inform the agency in writing that it was being investigated before an inquiry is conducted.

Tea farmers are hoping to earn more this year following a rebound of prices at the Mombasa auction due to declining production.

The Kenya Tea Development Agency yesterday said production dropped by a third in February compared to the same month last year, signalling an end of a market glut that had seen the prices fall to a record low last year.

Agency chief executive Lerionka Tiampati said the decline will continue, potentially correcting an impending poor pay to farmers that had been forecasted earlier in the year.

“The month of June usually marks the onset of the cold season ahead of July when farmers take advantage of the season to prune their tea bushes for increased productivity. We, therefore, cannot expect increased production during this period even with increased rains,” he said.

Following the decline in production, tea prices have been improving and peaked at $2.55 a kilogramme in March, compared to $2.09 in the same period last year.

According to the tea agency, green leaf supplied by farmers to factories in March fell more than twice to 38 million kilogrammes from 91 million kilogrammes the same period last year.

Producers received one of the lowest bonuses last year, blamed on overproduction.

Meanwhile, the tea agency yesterday got a temporary reprieve after the High Court barred the Competitions Authority of Kenya from implementing an incriminating report on the tea sector.

Justice Weldon Korir in his ruling, directed competitions authority not to make any decision against tea agency with regard to an audit report that allegedly revealed massive price fixing at the Mombasa Tea Auction.

The judge said the report, benchmarking or marketing enquiry for the tea sector in Kenya, should be withheld until the case is heard and determined as it was likely to disrupt the tea industry.

“In the case, the parties have agreed that there was a report and it is under validation. Any continued step to the report then will be to the detriment of tea agency,” he said.

The tea agency, however, suffered a setback when the judge allowed over 1,000 small-scale farmers to be enjoined in the case as interested parties.

He ruled that the suit affected the tea agency noting that any action that was to be taken against the agency was also to affect tea farmers.

Justice Korir also acknowledged that the case before him had a link to the one filed by the farmers in Kericho.

Consequently, he ruled that the Nairobi case be transferred to Kericho High Court.

“The court orders that the stay of the report will be in force until June 15. It will be mentioned before the court in Kericho on May 19,’’ he ruled.

In its petition The Kenya Tea Development Agency told Justice Korir that according to the law the competitions authority was duty-bound to inform the agency in writing that it was being investigated before an inquiry is conducted.

Additional reporting by Mazera Ndurya