A survey of exchange rate fluctuation on tea export earnings among smallholder tea factories in Kenya

Abstract

This study sets out on a survey to establish how earnings among smallholder tea factories are affected by this arrangement. The smallholder tea factories are managed by KTDA Ltd on behalf of smallholder tea growers. The research design used in this study is survey design. This involved collection of data from members of the population in order to determine the current status of that population with respect to various variables. It entailed asking respondents questions by administering a questionnaire and by interviewing them.

The target population in the study is 59 smallholder tea factories exporting their tea produce through Mombasa Tea Auction. These factories are situated on the highlands. They are spread some to the East and some to the West of the Great Rift Valley. The factories are managed by KTDA Ltd and the sample and sampling techniques is census. This study utilized a questionnaire in conjunction with interviews and content analysis.

The study has also employed correlation analysis technique. The analysis shows that there is a positive relationship between percentage changes in exchange rate and percentage change in net pay per kilogram of green leaf paid. This research concludes that exchange rate fluctuation has some effects on the earnings of smallholder tea factories. There is positive correlation between appreciation of Kenya shilling and increase in earnings. The appreciation of Kenya shilling relates positively to increase in value of sales in Kenya shilling but inversely related to the quantities of teas exported.