Farmers in Kenya's west of the Rift received the lowest bonus for the 2023/24 financial year as earnings were dented by unsold tea stockpiles at the Mombasa auction, industry data showed.

Factories in the region posted weak earnings, with much of their tea rejected at the auction due to a government-mandated minimum price that deterred buyers.

Apart from Momul in Kericho County, which paid Ksh46 per kilo, most factories in the west reported earnings below Ksh30 per kilo, compared to up to Ksh60 per kilo in the east of the Rift.

The lowest-paying factory in the west reported a bonus of Ksh15 per kilo, underscoring the financial challenges faced by farmers in the region during the last fiscal year.

The second payment, popularly referred to bonus, is determined by market prices and delivery volumes and serves as a balance to farmers' initial monthly payments.

The minimum price of $2.34 per kilo for Kenya Tea Development Agency (KTDA) tea, introduced in 2021 to shield farmers from losses, has left them with substantial unsold inventory.

A month ago, the Mombasa auction, the world's second-largest tea trading platform, scrapped the minimum price following government intervention and calls from stakeholders in order to boost sales.

Factories have struggled with over 100 million kilos of tea that could not be sold under the price floor, straining cash flow.

Brokers cited the gap between price and quality as a key issue, noting that buyers often opted for higher-grade teas over KTDA offerings.

Critics of the policy argued that linking the minimum price to production costs rather than market value was problematic.

Industry analysts highlighted that a uniform pricing model was unrealistic due to regional quality differences. The inflexibility of the minimum price policy has driven buyers toward premium teas, leaving significant volumes of KTDA tea unsold at the auction.

Brokers have consistently noted that teas from the east of the Rift possess distinctive characteristics that allow them to command higher prices compared to those from the west.