Tea factories will soon be allowed to sell their tea directly in foreign markets without the need for middlemen, Cabinet Secretary for Agriculture and Livestock Development Mutahi Kagwe has announced.

The cabinet secretary says the strategy is among a raft of interventions being undertaken by his ministry to enhance the sustainability of the multibillion tea sub-sector in the country. Kagwe said that the reforms are also geared towards promoting tea value chains and making the local tea sub-sector globally competitive.

“I am happy to report that, shortly through reforms being spearheaded by my Ministry, we will soon be allowing tea factories to sell their teas directly into the international markets without intermediaries. This strategy will supplement the government of Kenya marketing efforts, therefore translate to increased earnings to our tea farmers,” stated Kagwe.

Kagwe said that the ministry has also intensified efforts to penetrate emerging international markets for the export commodity. He revealed that plans are underway to dispatch high-level delegation comprising the Tea Board of Kenya (TBK), Kenya Tea Development Agency (KTDA) and East African Tea Association (EATTA) to key international markets in the Far East, Middle East, China, Russia and India to aggressively market and promote Kenya’s tea.

He also announced the opening of an orthodox tea auction window within the Integrated Tea Trading System (ITTS). The auction will be supervised by EATTA working jointly with the industry regulator, Tea Board of Kenya.

As of July 2024, there was an estimated 100 million kilogrammes of unsold tea at the Kenya Tea Development Agency warehouse in Mombasa. According to the cabinet secretary, the auction which will open in June this year, will be instrumental in offloading a substantial bulk of its unsold orthodox teas to the global market.

“The orthodox tea auction will set the stage for a reliable distribution outlet that is expected to enhance renewed motivation to sustainable product diversification from Cut, Tear and Curl (CTC teas) to orthodox teas. This is a new initiative and it will have a serious impact on the pricing of tea in our country and overseas,” the cabinet secretary said.

Kagwe spoke on Friday at Gitugi Tea Factory in Othaya Nyeri County during the launch of the International Tea Day celebration. This year’s fete is themed Tea Industry Sustainability: Looking into the Future with the cabinet secretary reiterating his commitment to ensuring that tea farmers receive the necessary government support to ensure they reap maximum benefits from their tea farming venture.

He at the same time rallied farmers and stakeholders in the tea sub-sector to work towards improving the quality of tea.

“I wish to reiterate my ministry’s key focus in ensuring that the tea sector is supported and protected. I want to particularly emphasise the support we are giving in terms of introduction of ICT and Technology, soil testing and commensurate support through TBK activities and ensuring that the farmer ends up with most of the money from the tea sales from the international market,” Kagwe said.

“Kenya has the best quality tea globally and we therefore need to retain the good quality so that we can continue to fetch the best prices. That is why I am insisting that the quality of tea that leaves our borders must be the best quality and the reputation of Kenya as the source of the best tea must be maintained at all cost, “he added.

The cabinet secretary was accompanied by TBK Chief Executive Officer Willy Mutai, Nyeri County Commissioner, Ronald Mwiwawi, KTDA Zone Four Director David Ndung’u, Nyeri Senator Wahome Wamatinga, Woman Representative Rahab Mukami and Othaya Member of Parliament Wambugu Wainaina.

The Tea Board of Kenya CEO expressed optimism that the interventions being implemented in the sub-sector will pay-off resulting in better prices and steady markets for tea. Last year Kenya made Ksh215 billion from overseas tea sales. The good returns came at the backdrop of increased tea production from 570 million kilogrammes in 2023 to 598 million kilogrammes produced in 2024.

“We are working hard to ensure that we sell all the orthodox teas. If we continue leveraging our volumes, the price could even triple what we are currently selling in our orthodox teas. Currently, the orthodox tea is fetching between $3.4 and $4 and I am sure if we remain persistent this could go up to $10 in the Chinese market,” said Mutai.

Zone Four KTDA Director David Ndung’u lauded the cabinet secretary for his efforts to attract new markets as well as the efforts being made to recover the Iranian tea market which he said is key to the country tea subsector.

Ndung’u further praised the ministry for fronting proposals to exempt tea packaging materials from tax in the 2025/2026 Finance Bill, which he noted will significantly reduce the cost of production and boost farmers’ earnings.

“Kenya has the best quality tea globally and we therefore need to retain the good quality so that we can continue to fetch the best prices. That is why I am insisting that the quality of tea that leaves our borders must be the best quality and the reputation of Kenya as the source of the best tea must be maintained at all cost,” he added.

The CS was accompanied by TBK Chief Executive Officer Willy Mutai, Nyeri County Commissioner, Ronald Mwiwawi, KTDA Zone Four Director David Ndung’u, Nyeri Senator Wahome Wamatinga, Woman Representative Rahab Mukami and Othaya Member of Parliament Wambugu Wainaina.

The Tea Board of Kenya CEO expressed optimism that the interventions being implemented in the sub-sector will pay-off resulting in better prices and steady markets for tea. Last year Kenya made Ksh215 billion from overseas tea sales. The good returns came at the backdrop of increased tea production from 570 kilogramms in 2023 to 598 kilogrammes produced in 2024.

“We are working hard to ensure that we sell all the orthodox teas. If we continue leveraging our volumes, the price could even triple what we are currently selling in our orthodox teas. Currently, the orthodox tea is fetching between $3.4 and $4 and I am sure if we remain persistent this could go up to USD 10 in the Chinese market,” said Mutai.

David Ndung’u lauded the cabinet secretary for his efforts to attract new markets as well as recovery of the Iranian tea market which he said way key to the country tea subsector.

Ndung’u further praised the ministry for fronting proposals to exempt tea packaging materials from tax in the 2025/2026 Finance Bill which he noted will significantly reduce the cost of production and boost farmers’ earnings.

“Kenyan tea is packaged by the Philippines in Dubai at three times less than what it would cost us to do it locally. The tax exemptions on packaging materials will directly affect the farmer because by going to Dubai we used to lose jobs and revenue which will now go back to the farmer,” he said.

In a move that could significantly increase domestic tea sales, the director also proposed the exemption of the 16 per cent Value Added Tax charged on local tea sales. Out of the Ksh250 billion ($1.93 billion) earned last year from the sale of tea, Ksh18 billion ($139 million) was from the sale of tea in the local market.

“This exemption will encourage a spike in local tea sales from the current five per cent. One of the biggest challenges hindering local consumers from buying our teas are these taxes that make it expensive,” said Ndung’u.

Other bottle necks that Ndung’u asked the cabinet secretary to address include the elimination of inter- county trade barriers. Additionally, he also urged the government to improve the road network to ease the smooth transportation of tea from the buying centres to the factories.

“Poor roads increase the cost of production because factories have to incur additional costs of either repairing vehicles damaged by poor roads or purchasing new vehicles. Our tea could be fetching the farmers a lot of money, but the high cost ultimately prevents them from enjoying them,” he said.

• A Tell Media / KNA report / By Wangari Mwangi