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The Nairobian

PS assures farmers unsold tea will not affect bonus payout

Business

By Joackim Bwana | Aug 03, 2024

**Agriculture Principal Secretary Paul Ronoh.** [File, Standard]

The bonus payout to farmers will not be affected by tea piling up in the warehouses in Mombasa.

On Friday, Agriculture Principal Secretary Paul Ronoh said the government has intervened to ensure that the over 100 million kilograms of unsold tea gets market soon.

Speaking during a meeting with traders at the Mombasa Tea Auction, Mr Ronoh announced that the warehouse cost would be waived.

“The unsold tea is due to increased production. It will make no difference when it comes to payment of bonuses as we commit to sell the 100 million kilograms of tea within a month,” he said.

The PS said the country was witnessing overproduction of tea due to increased acreage and favourable weather conditions. However, traders at the Mombasa auction blamed the glut on the reserve prices directive.

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Interviews with stakeholders at the weekly Mombasa Tea Auction also indicated that the halting of direct exports by the Kenya Tea Development Agency (KTDA) contributed to the increase in unsold tea.

Data from the East Africa Tea Trade Association shows that the problem started last year when over 40 per cent of the tea offered for sale was not bought. Ronoh said that the government and tea stakeholders will work together to reduce volumes of unsold teas from smallholder tea factories managed by KTDA.

He revealed that the government would amend the Tea Act 2020 to allow for Direct Sales Overseas by all tea producers, including factories by KTDA. Ronoh promised that the reserve price mechanism would be reviewed.

“All tea producers shall adhere to a tea quality standard of at least 65 per cent to reverse the declining quality,” he said.

It emerged that KTDA is holding 100 million kilograms of unsold tea from smallholder factories.