Kenya Scraps Minimum Price For Tea To Boost Exports

NAIROBI, Oct 9 (Bernama-Xinhua) -- Kenya has abolished the minimum price requirement for its tea sold at the Mombasa auction, the primary market for tea in the region.

This move aims to increase the global competitiveness of Kenyan tea and boost exports, according to the East African Tea Trade Association (EATTA), reported Xinhua. 

George Omuga, managing director of the EATTA, an association of tea exporters, brokers and packers, said in a statement released in the Kenyan capital of Nairobi that the country scrapped the minimum price following consultations among stakeholders.

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In 2021, Kenya set the minimum price of a kilo of tea sold for the export market at US$2.34 to cushion farmers from losses. However, the regulation had unintended consequences as buyers shunned tea produced in the East African country, leading to stockpiling at the auction.

Following the abolition of the reserve price, EATTA, which runs the auction where tea from East African Community countries is sold, urged players in the value chain to ensure transparency.

"Observe ethical tea pricing practices to ensure that teas are not sold at prices that are below production costs," Omuga said.

Kenya's tea export earnings rose 18 per cent in the first half of 2024 to hit 102.4 billion shillings (about US$793.8 million), boosted by increased shipments to major markets such as Pakistan, Egypt, Britain, Russia, and Saudi Arabia.

Tea is one of Kenya's main foreign exchange earners, alongside horticulture and tourism, with the country earning US$1.4 billion from tea in 2023. 

--BERNAMA-XINHUA