Directors of the Kenya Tea Development Agency (KTDA)-managed factories are expected to announce the annual bonus payments for the 2025-2026 financial year early next month. They will provide financial documentation to support the declaration of the highly anticipated second payment. In the past 11 months, farmers supplied over 1,094,710,523.06 kg of green leaf for processing, compared to 1,144,364,053.46 kg in the previous year.
The tea industry faced significant challenges due to global events, including the closure of the Strait of Hormuz, which caused delays and increased expenses. Additionally, the introduction of a 0.8 per cent tea levy on May 1 slowed the absorption of premium teas into the market. As a result, buyers shifted their focus to lower-grade teas, and directors were compelled to urge buyers to purchase the produce at a reduced price.
Financial experts indicate that the directors will focus on revenue generated from tea sold through direct sales and the Mombasa Tea Auction, as well as annual expenditures, before declaring the bonus payment. Factory chairpersons confirmed that meetings are scheduled to analyze the payments at the end of the month, in accordance with the procedures required to facilitate the release of the second payment.
Last year, the best bonus payments were awarded to Rukuriri at Sh57.50, Mununga at Sh57, Gathuthi at Sh56, Imenti at Sh56, and Ngere at Sh53.10. Rukuriri Tea Factory, located in Embu County, led 11 factories in paying a bonus above Sh 50 per kilogram of green leaf. Other factories, including Mununga, Gathuthi, and Imenti, also paid bonuses above Sh 50.
Tea value chain expert Peter Karomo highlighted that the tea sector faced significant challenges due to global events. He noted that the introduction of the tea levy slowed the absorption of premium teas into the market. Karomo stated that the directors were compelled to urge buyers to purchase the produce at a reduced price, fearing that unsold tea would accumulate in warehouses.
Jane Naitore, a farmer in Meru County, expressed that due to the rising cost of living, they expect to receive less than Sh 35 per kilogram of the green tea leaves they supplied to their respective factories. KTDA Holding National Chairman Enos Njeru stated that growers are aware of the challenges the tea industry has faced this year, but they have remained supportive by producing quality green leaf for processing.
Njeru emphasized that the tea bonus is paid differently depending on the revenue and production costs of each factory. He urged the government to reconsider and remove the 0.8 per cent export levy, as it negatively impacts tea farmers by diminishing their expected earnings and bonuses. The removal of the levy could potentially increase the bonus payments for tea farmers.
Key points
- The directors of KTDA-managed factories are set to announce the annual bonus payments for the 2025-2026 financial year early next month.
- The tea industry faced significant challenges due to global events, including the closure of the Strait of Hormuz and the introduction of a 0.8 per cent tea levy.
- The bonus payments will be based on revenue generated from tea sold through direct sales and the Mombasa Tea Auction, as well as annual expenditures.
