KENYA – The Tea Board of Kenya (TBK) has announced plans to license more agents in a bid to expand the market for Kenyan tea.
CEO Willy Mutai revealed that the board intends to amend regulations that have been in place since 2008, aiming to revitalize the tea industry and improve the livelihoods of farmers.
Mutai stated: “Going forward, we will have regulations to regulate the sector to curb issues of illegal malpractices such as having a few individuals trading tea. This will allow us to license more traders or buyers.”
The new regulations will enable TBK to license more traders, including individuals and private firms, who can access more markets within Kenya, across Africa, and globally.
Additionally, there will be regulations concerning the marketing of Kenyan tea and the amount that farmers should be paid.
Mutai praised the steps taken by the government and key players in the sector, including the Kenya Tea Development Agency (KTDA), to add value to Kenyan tea.
He highlighted the KES1 billion value addition projects in Kericho and Nairobi, which are progressing well. The government’s decision to allocate KES2 billion in the supplementary budget to reduce fertilizer costs was also commended.
This measure is expected to enhance the production of high-quality tea and increase returns for farmers.
The announcement comes as the government considers dropping the minimum auction price set in 2021, amid concerns over unsold tea stocks in warehouses.
Reports indicate that 20 million kilograms of tea produced in 2023 and earlier remain unsold. The government has requested TBK and KTDA to provide comprehensive details on the unsold tea.
The minimum price, set at US$2.43 per kilogram by KTDA for processed tea from affiliated factories, aimed to protect smallholder farmers from losses when auction prices fell below the two-dollar mark in 2021.
Prime Cabinet Secretary Musalia Mudavadi noted that the intervention led to unintended consequences without addressing the root causes of the price decline. He emphasized that declining tea quality was a significant factor in the low prices, which the minimum pricing policy failed to address.
“Moreover, setting a minimum price did not incentivize improvements in tea quality,” Mudavadi added.
Investments PS Abubakar Hassan has indicated that the government will engage with sector players to discuss the potential repeal of the minimum price regulations and find a way forward for the industry.
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