KTDA cites weak shilling and global market shifts as farmers brace for lower bonuses

The Kenya Tea Development Agency (KTDA) has moved to explain why farmers should expect lower bonuses this year, citing unfavorable international market conditions and currency fluctuations.

In a statement on Tuesday, KTDA said the weakening of the shilling had a direct impact on farmers’ earnings despite stable global prices.

“In 2024, the Kenya Shilling traded at an average of Ksh 144 to the US dollar, while in 2025 the average was Ksh 129,” the statement noted. “This weaker exchange rate meant that even where international prices were stable, the amount realized in Kenya Shillings was significantly lower.”

The bonus payouts are set to drop across several tea-growing counties. Farmers in East Rift and Kiambu will now earn Ksh 371 per kilo, a drop of Ksh 46 from last year. Murang’a farmers will earn Ksh 376, down Ksh 42; Nyeri Ksh 388, down Ksh 42; Kirinyaga Ksh 400, down Ksh 38; Embu Ksh 404, down Ksh 34; and Meru Ksh 381, down Ksh 46.

KTDA explained that tea grown in high-altitude regions continues to fetch better prices due to its superior quality, which is highly sought after in international markets.

The agency acknowledged that the challenges facing farmers are largely global but assured growers that reforms are underway. These include expanding production of orthodox teas that fetch premium prices, working with the government to boost value addition, reducing packaging costs, and exploring new markets such as China. KTDA is also investing in factory modernization and cheaper energy solutions to cut production costs.

Chairman Chege Kirundi emphasized the agency’s “Farmers First” approach, promising efficiency, transparency in auctions, and innovative marketing strategies. But with thousands of farmers depending on tea for their livelihoods, many say they are watching closely to see whether promises will translate into tangible results — particularly in the timely supply of farm inputs and improved factory operations.

Kenya remains the world’s top exporter of black tea and the second-largest producer after China, but its heavy reliance on bulk sales through the Mombasa auction continues to expose farmers to price shocks.