Tuesday, 1 April, 2025
Senate Trade Committee probes challenges in Kenya’s Tea Industry
Mombasa County𝐖𝐞𝐝𝐧𝐞𝐬𝐝𝐚𝐲, 𝟐𝟔𝐭𝐡 𝐌𝐚𝐫𝐜𝐡, 𝟐𝟎𝟐𝟓
The Senate Standing Committee on Trade, Industrialization and Tourism, led by Kwale County Senator Issa Boy Juma, visited Mombasa County to assess key challenges affecting Kenya’s tea industry.
During their tour of the Mombasa Tea Auction, the committee engaged industry stakeholders on issues related to pricing, taxation, land tenure, market access and government policies.
During the discussions, Senator Issa Boy Juma raised concerns over price disparities in the tea sector, questioning why tea from similar altitudes and production methods had varying prices.
Senator Jackson Mandago scrutinized the auction process, urging for more transparency to ensure that farmers receive fair prices.
Senator Okiya Omtatah focused on the taxation burden on farmers, questioning whether government levies were truly benefiting the sector. He pointed out that excessive taxation and high operational costs were making it difficult for smallholder farmers to compete in global markets.
The committee also addressed Sudan’s economic challenges and international sanctions, which have negatively impacted Kenya’s tea exports. Senator Esther Okenyuri sought clarification on the volume of tea that Sudan had been purchasing before the sanctions and whether alternative markets were being explored to mitigate potential losses.
In response, industry stakeholders outlined the major barriers affecting the tea trade. One of the key concerns was the high cost of packaging materials, which accounts for 75-80% of the price of a packet of tea bags. The increased import duties on paper have also made it difficult for local businesses to compete with cheaper foreign alternatives. Additionally, a Ksh 3 billion VAT burden has significantly reduced income accessibility, leading to capital flight as more businesses struggle to remain profitable.
The impact of COVID-19 on consumer habits was also discussed, with stakeholders noting that many buyers have shifted to online shopping, a trend that has continued even after the pandemic. There were calls to support local branding and export competitiveness, particularly to strengthen Kenya’s position in global markets such as India and the UK.
Concerns were also raised about government interference in market regulation, with stakeholders citing minimum price regulations and bureaucratic inefficiencies as barriers to growth.
Additionally, experts called for policy reforms to encourage value addition, recommending that at least 40% of Kenya’s tea be processed locally before export to enhance profitability.
As the discussions concluded, the Senate Trade Committee committed to compiling a report with recommendations on fair pricing policies, tax reforms, land tenure solutions, export diversification and increased value addition.
The committee further visited the Kenya Ports Authority (KPA) and the Dongo Kundu Special Economic Zone.