Kenya risks losing nearly Ksh138 billion in annual earnings from black tea exports after two major buyers reduced their demand, according to global market projections dated Friday, April 21.
The reports indicated that Kenya's black tea exports dropped in the first two months of the 2023 first quarter, with Pakistan and Egypt reducing their demand for the product.
Kenya's black tea shipment dropped in January and February by nearly 31 per cent. During that period, only 62.9 million kilograms of black tea were exported.
A report from the Tea Board of Kenya indicated that Kenya collected Ksh138 billion in 2022. Thus, reduced shipments are poised to affect the country's earnings.
Besides reduced exports, black tea auctions also dropped between January and February. The drop in auctions was attributed to economic downtimes, which had affected businessmen in Pakistan, Egypt, Sudan, and the UK.
However, shipments to United Arabs Emirates and Iran remained stable in the first quarter.
Additionally, production in January and February dropped by 24 per cent hitting 87.6 million kilograms due to unfavourable weather experienced in the country in 2022.
To save the sector and avert the Ksh138 billion loss, President William Ruto directed his deputy, Rigathi Gachagua, to spearhead reforms.
Among the issues Gachagua vowed to tackle are increasing farmers' pay and streamlining the export sector.
"We are concerned about the capture of the sector by various forces which are working to the disadvantage of the farmers. We want to free the sector from these forces," Gachagua stated.
"We have no personal interest in the sector other than the interest of the local farmers. The situation we have now is not pleasant. It is a vicious cycle of poor returns for our tea farmers. The tea farms make beautiful scenery across the country, but the owners remain poor," he insisted.
He also convened meetings with Kenya Tea Development Agency (KTDA) to revive the sector and streamline the licensing of farmers and exporters.
