KENYA – As jitters surrounding exports of Kenyan tea continue to rise due to the shortage of US Dollars, and a recent report from a major newspaper in Pakistan claiming tea imported from Kenya was not worth the exorbitant price charged, tea companies are resolving to exploit the local market.
Until 2025, Market Research projects the tea market in Kenya to have a CAGR of 7.93% per annum growth for the forecast period 2020-2025 to reach US$2.04 billion (in retail prices).
Taking advantage of the projected growth for the market, the Ngere Tea Factory in the Gatanga Sub-County of Murang’a has commenced packaging and branding of its processed tea to service the increasing local consumption of tea to reduce its reliance on the export market.
The factory, which produces 800 metric tonnes of tea per month, has noted that 20 percent of the product would be sold in the local market.
This move will see the factory stop depending on selling its goods through the Mombasa Tea Auction, where the product is prone to fluctuations in international prices.
The factory, allied with the Kenya Tea Development Agency (KTDA), said its brands will be packaged as low as 20 grams of tea leaves, targeting small earners who are the majority in the market.
“Our farmers need more earnings, but solely selling our products through the Mombasa Auction Centre cannot bring us much income, considering the prices there sometimes slump to about US$2.40 and US$4 per kilo,” Chairperson of the factory, Joseph Karanja stated.
“Through the auction, we are at the mercy of the global market, which keeps on changing depending on various factors. Kenyans use tea and as a factory we want our commodity to be sold locally. We have four brands that have been registered to be produced for the local market. We are now out to campaign for increased consumption of tea locally.”
The packaged product, branded as Highland Classic tea, according to Karanja, was a way of doing value addition, noting that a kilo of the branded tea will now be sold at Sh400 in the local market.
The executives of the tea factory highlighted that the local market would help the factory get a consistent price, enabling it to stabilize its cash flow, while giving farmers a guaranteed return.
Apart from scaling down to the local market, the Ngere Tea Factory is also looking to expand its presence to the neighboring markets, including South Sudan, Congo, and other African countries.
Pakistan is the biggest export destination for Kenya’s tea taking up 38 percent of the total weekly sales at the Mombasa Tea Auction, followed by Egypt (18%), the UK (9%), UAE, Russia, and Sudan each five percent, Yemen (3%) while Afghanistan and Poland each take up two percent share of the exports.
Recently, Dawn, a Pakistan newspaper wrote about why many people in the country would soon stop taking tea, arguing that “the increase in its price by 3x over the last decade, according to data by the Pakistan Bureau of Statistics (PBS), hits wallets harder than people realize.”
According to PBS, a cup of tea in Pakistan was costing Ksh7 in 2012 but rose exponentially to Ksh23 in 2023, Dawn cited, expressing worry that citizens were spending up to 30 percent of their salary on tea as minimum wage in the country is pegged at Ksh7100.
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