Nairobi, Oct 13 - Kenyan small scale tea farmers will earn about $260 million this year, up 3.7 percent from last year, as the sector battles high costs and a weakening local currency, the tea development authority said on Monday.
East Africa's biggest economy is the world's leading exporter of black tea and has forecast total earnings could hit a record $684 million in 2008, despite lower output.
"This has been a good year for farmers with auction prices up to an average of $2.14 per kg," said Lerionka Tiampati, managing director of the Kenya Tea Development Authority (KTDA).
He said KTDA was paying farmers an average of 67 percent of total earnings, compared to 65 percent in the previous year.
He told reporters the industry was grappling with high fuel, labour and input costs, as well as the depreciation of the shilling <KES=>, which slid to a near three-year low on Monday.
He said 95 percent of Kenyan tea was exported, meaning revenues could also be harmed by the global financial turmoil.
Last month, the Tea Board of Kenya said 2008 earnings could reach a record $684 million, compared to $572 million last year.
The regulator said it expected production this year to drop to 335 million kg, compared with 369 million produced in 2007.