KENYA – Kenya has called on the Tea Board of Kenya (TBK) and the Kenya Tea Development Agency (KTDA) to provide comprehensive details of all unsold tea held at the Mombasa auction.
This request follows reports that 20 million kilograms of tea produced in 2023 and earlier remain unsold and are stored in Mombasa warehouses, accumulating substantial warehousing charges.
Additionally, 95.2 million kilograms of fresh tea remained unsold as of the end of June 2024.
In a letter addressed to both KTDA and TBK, Prime Cabinet Secretary Musalia Mudavadi emphasized the need for detailed information on the shelf life of the unsold tea, space occupied, stocks currently held in Mombasa, lessors of the warehouses, and who will ultimately bear the cost of warehousing.
This information is deemed crucial for the government to devise a lasting solution to stabilize the tea industry amidst the surplus.
“The accumulation of unsold tea hampers producers’ ability to pay farmers on time, significantly affecting their income. This situation has resulted in accumulation of unsold teas at the auction, severely impacting prices and causing a market glut,” Mudavadi stated.
He also requested information regarding KTDA’s level of indebtedness to farmers per factory as of June 30, 2024.
Tea prices at the Mombasa auction were on a downward trend in 2022, prompting the government to establish a minimum reserve price of US$2.6 for teas from the east of the rift and US$2.4 for teas from the west of the rift.
This initiative aimed to stabilize the market and address declining tea prices at the auction.
The call for transparency comes as at least 650,000 tea farmers anticipate 96,988 metric tonnes of subsidized fertilizer during the short rainy season projected to start in October.
Kennedy Ochwando, the head of procurement and logistics at KTDA, announced that the first consignment of the bagged fertilizer is expected to arrive in the country this week.
Last year, KTDA imported 92,737 metric tons of fertilizer, and this year’s bulk importation of NPK fertilizer is expected to leverage economies of scale, enabling farmers to secure the fertilizer at the best possible price.
“By importing the fertilizer in bulk, KTDA can provide it at the best possible price to the smallholder tea farmers. We have continued to enjoy the benefits of economies of scale, which are then passed on to our farmers,” Ochwando stated.
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