KENYA – Tea exporters in Kenya are facing significant challenges as the cost of exporting tea through the Mombasa port nearly triples due to a shortage of merchant ships and sustained attacks by Yemen-based militants on vessels transiting through the Red Sea.
According to Hassan Bule, a Mombasa-based tea buyer, the cost of shipping a 40-foot container to key destinations such as Russia has risen more than three times.
He stated, “It used to cost a tea exporter about KES339,418.27 (US$2,442) to ship a 40-foot container to Russia… but today it is about KES904,764.78 (US$6,513).”
The situation has been aggravated by the ongoing Russia-Ukraine war, which has forced vessels to take longer routes following the closure of the Black Sea route.
George Omuga, managing director of the East African Trade Association (EATTA), highlighted the impact on tea traders, stating, “Ship turnaround time has remained a challenge… This has seen the volumes of tea exported to Russia and other neighbouring countries significantly dwindling.”
Furthermore, the high freight costs and delayed shipments have affected the weekly auction in Mombasa, where prices have risen due to bigger demand for the quality crop.
In this week’s trade, a kilo of premium Kenyan tea sold at KES571.82 (US$4.10) compared to KES422.58 (US$3.03) at the beginning of the year.
The disruptions in shipping have led to a pile-up of stocks in warehouses as exporters wait for vessels.
Omuga emphasized the need for action, stating, “We have engaged Kenya Ports Authority to give priority to such ships… to discuss how best we can reach an agreement about the skyrocketing freight costs.”
The impact of the shipping delays has also affected other sea port states, with major shipping lines either stopping or temporarily halting Red Sea operations since last November.
The Kenya Ports Authority has been urged to address the situation urgently to mitigate the effects on tea exporters and the broader economy.
Despite the challenges in the tea sector, Kenya recorded 31 percent increase in the value of tea exports in 2023, setting a record high for the tea industry.
Officials have attributed the surge to a rise in export volumes during the year and a depreciation of the local currency.
Willy Mutai, CEO of the Tea Board of Kenya, unveiled the impressive statistics during the launch of the tea industry performance results for 2023 in Nairobi.
The total export volume also witnessed a substantial increase, rising from 450.33 million kg in 2022 to 522.92 million kg in 2023, marking a 16 percent increase.
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