Newly sworn Kenya Deputy President Kithure Kindiki assured tea industry stakeholders that the government’s “Bottom-up Transformation” reform will benefit them.
Kenya appointed a 21-member task force to dispose of 100 million kilos of unsold tea quickly. The tea is valued at Ksh 32 billion, about $247 million in US dollars.
Agriculture Cabinet Secretary Andrew Karanja instructed the public-private tea stakeholders to investigate the underlying causes and propose short- and long-term solutions as part of the government’s ‘Bottom Up Transformation’ agenda.
Global tea production continues to outpace consumption. In 2023, global production was approximately 6.6 million metric tons, while consumption was estimated at 6.2 million metric tons, resulting in a surplus of 392,000 metric tons last year.
The trend is ongoing. Beginning in 2016 and continuing in 2017, the global tea surplus totaled around 200,000 metric tons annually. There were shortfalls during the pandemic years that followed, but tea production has since accelerated.
According to industry leaders, addressing the imbalance is crucial for ensuring the tea industry’s sustainability and profitability.
Kenya’s surplus is carried over from two harvest years and far exceeds stocks that usually total 40 million kilos globally. The unprecedented quantity is overflowing factories and warehouses in Mombasa and producing regions. Kenya annually harvests about 600 million kilos of tea from green leaf plucked by 800,000 tea farmers.
Low sales result from favorable weather, government-imposed auction minimum prices, logistical disruptions tied to the ongoing Red Sea crisis, inept factory management, unfair supply chain policies, and unscrupulous brokers engaged in what has been described as unethical practices.
Kenya’s small growers receive monthly payments based on the amount of tea they harvest but do not earn a fiscal year-end bonus on unsold tea. Deputy President Kithure Kindiki promised to “correct the market misfortunes affecting tea farmers. Their livelihoods depend on our actions.”
Kindiki was sworn in as Kenya’s deputy president on Nov. 1, replacing ousted Rigathi Gachagua following a dramatic series of impeachment votes.
Kindiki pledged two weeks ago to implement administrative reforms to streamline the tea sector. According to the Citizen Reporter, Kindiki told the Kenya Tea Summit attendees, “Tea is the third foreign exchange earner after Diaspora remittances and tourism. Tea gives us jobs, especially in rural communities, especially our women, who find a lot of decent jobs in the industry.”
The surplus has also affected auction prices that remain well below the government’s suspended minimum reserve price of $2.43 per kilo.
Kenya tea sells for around $2.20 per kilo at auction, well below neighboring Rwanda, where auction prices top $4 per kilo.
The task force, chaired by Nicolas Munyi Kagua, was empowered with regulatory authority, policy assessment, and recommendations for a plan of action. Its 14 members and six-member secretariat were also tasked with a performance review of the Kenya Tea Development Agency (KTDA) factories.
The task force has 60 days to submit findings.