Kenya tea factories pay lower bonuses despite higher auction prices
Reduced leaf production and increased monthly payments explain the drop in farmer payouts for the 2025/26 bonus year.
Kenyan tea farmers received smaller bonuses in the 2025/26 bonus year, even though average auction prices in US dollars rose by 3% to USD 2.23 per kilogramme. Many factories paid less despite a stable shilling and higher sales volumes, with Rukuriri factory reducing its bonus from KES 57.50 to KES 50. This occurred as monthly payments increased from KES 25 to KES 30.
EBC Financial Group analyst David Precious stated that the bonus is calculated after costs and monthly payments, meaning higher interim payouts reduce the final bonus. Leaf deliveries fell by 4.34% in the first 11 months of the financial year, with national output down significantly in January and February due to dry weather. Fuel costs also rose, peaking at KES 242.92 a litre in May.
Despite the lower bonus, total farmer pay may not have decreased due to earlier monthly disbursements. The Kenya Tea Development Agency (KTDA) had previously attributed bonus reductions to lower prices and exchange rates, but these factors improved or held steady in 2025/26. Output levels recovered from March onwards, exceeding 2025 levels.
Why it mattersKenyan tea farmers are directly affected by lower bonus payouts, impacting their income despite increased auction prices.