Kenya implements new measures to boost tea prices, address unsold stock
KENYA – The Kenyan government and the Kenya Tea Development Agency (KTDA) have introduced a series of measures aimed at improving tea prices and addressing the issue of unsold stock.
These actions follow concerns over an estimated 100 million kilos of unsold tea stored at KTDA warehouses in Mombasa as of July last year.
In August, the government suspended the minimum reserve price, previously set at Kes 313.31 per kilo in 2021, in an effort to stimulate new purchases and reduce stockpiles that had been avoided by buyers. Officials hope this move will reinvigorate the market while safeguarding farmers’ earnings.
During a meeting in Kisumu chaired by Agriculture Principal Secretary Paul Ronoh, it was agreed that all tea factories must provide updates on their unsold stock within one week to the Tea Board of Kenya for further action.
“All tea factories are required to provide data on unsold teas so that the necessary steps can be taken to address the issue,” Ronoh stated.
As part of the resolutions, a ban on selling tea below the cost of production was enforced, with factory directors assuming full responsibility for managing sales.
Additionally, factories were urged to enhance tea quality, and directors were instructed to engage with brokers to establish competitive pricing strategies.
To further support the sector, the government committed to reviewing levies and taxes on tea to promote value addition industries. Financial support was also pledged to assist older factories in upgrading their operations.
Efforts to explore new markets for Kenyan tea were discussed, with buyers expressing their willingness to support better prices for farmers.
The meeting included members of a special task force established to investigate the causes behind the accumulation of unsold stock and its impact on the tea sector.
The 15-member team, led by chairperson Nicholas Munyi, is tasked with identifying short-, medium-, and long-term solutions to the issue. It will also examine delays in payments, warehousing conditions, and pricing disparities between tea produced in the East and West of the Rift Valley.
As part of its mandate, the task force will hold meetings and public forums with industry stakeholders across the country to gather insights and recommendations.
Meanwhile, Kenya has become the first African country to host a decaffeination facility. Global Tea & Commodities Limited is set to invest Kes3.2 billion (US$24.76 million) in a new tea processing plant in Kwale County.
This investment is expected to enhance value addition for Kenyan tea and coffee, boosting earnings for farmers and strengthening the country’s position in the global tea market.
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