• June 15, 2024

BAT Kenya Ups Leaf Price to Secure Supply

 BAT Kenya Ups Leaf Price to Secure Supply
Photo: Taco Tuinstra

BAT Kenya is paying more for leaf to ensure the security of its supply, reports Business Daily Africa.

In fiscal year 2023, the cigarette manufacturer increased its per-kilo price by 5 percent to KES198.75 ($1.50) even as the number of contracted farmers dropped to 1,672, down nearly 20 percent from the previous fiscal year.

Only five years ago, BAT had access to 5,700 tobacco growers in Kenya. The drop has been driven in part by farmers abandoning tobacco in favor of alternative crops such as beans and maize, along with pressure from anti-smoking activists.

To help stem the decline, the company has been offering free tobacco seedlings, fertilizer and personal protective equipment. In addition, it has encouraged crop diversification by issuing farmers subsidized maize and avocado seeds, allowing them to earn extra income without abandoning tobacco.

The company has also been introducing hybrid tobacco seed varieties to boost crop yields and disease resistance, and low-cost technologies such as mechanized ploughing and ridges to help growers cut cost and maximize returns.

BAT Kenya paid KES954 million for its total tobacco requirements in 2023 compared with KES946 million in 2022. Last year, it purchased 4.8 million kg of leaf, down from 8.9 million kg in 2019.