KENYA – Agriculture Cabinet Secretary of Kenya, Mithika Linturi, flagged off the first-ever consignment of 2.68 metric tons of Kenyan value-added tea worth ShUS$29,667.6(Sh3.7 million) to Australia amid plummeting demand for the beverage in the auctions.
The consignment of tea has been shipped to Australia under the Kenyan Brand “Akina” and is expected to fetch an average price of US$11(Sh1,375.77) per kilo of made tea in Australia.
Similar teas were being sold in bulk at the recent Mombasa tea auction, fetching an average of US$2.5 (Sh 312.68) per kilo of made tea.
“I am delighted to join you today to flag off the first-ever consignment of Kenyan value-added teas to Australia. The tea consignment, which is 2.68 metric tons valued at US$29,667.6, is being shipped to Australia under the Kenyan Brand ‘Akina’,” Mithika Linturi said.
He added that opening the Australian market to Kenya value-added teas with a Kenyan brand name is an important milestone for the Kenyan tea business.
According to Linturi, the export will protect the Kenyan tea sector from over-dependence on a small number of traditional markets that have a preference for bulk teas and are easily unstable by economic and political shocks.
“The initiative by Empire is a bold step towards the realization of His Excellency the President’s directive to increase the volumes of value-added Kenyan tea exports from the current 1 to 50 percent by 2027,” he underscored.
However, Linturi acknowledged that whereas Kenya is the world’s leading exporter of tea accounting for 28 percent of the Global tea exports, Kenya’s tea export earnings are relatively lower compared to the other key tea-producing countries.
He assured the country that the Ministry intends to increase agricultural GDP from Sh2.9 trillion to Sh3.9 trillion through the Agriculture Sector Transformation and Growth Strategy (ASTGS) by promoting product diversification and value addition along the agricultural value chains, including the tea value chain.
In addition, the Ministry will remove taxation on the packaging material to reduce costs and enable a competitive market for exporters.
According to Linturi, the high cost of packaging materials has attracted a Common External Tariff (CET) of 35 percent on imports and 16 percent VAT, even though the quality of packaging materials available locally may not meet the standards required in the export markets.
By removing taxation on packaging materials, the sector will be able to reduce packaging costs by about 30 percent, enabling exporters to be more competitive in the international market.
The development comes after Agriculture Cabinet Secretary Mithika Linturi met with a delegation from the Embassy of Saudi Arabia led by Am.
In a statement by the Ministry, the meeting focused on enhancing collaborations between Kenya and Saudi Arabia on access to farm inputs by farmers.
Linturi urged the Embassy of Saudi Arabia to consider importing tea from Kenya. In October last year, when President William Ruto flagged off the first consignment of Kenyan tea to Accra, Ghana under the African Continental Free Trade Area (AFCFTA) Guided Trade Initiative, he also announced plans to engage Tunisia, Morocco, and other countries in the region in a bid to expand Kenya’s tea export market.
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