Post: Tea Factories to Bypass Middlemen in New Direct International Sales Strategy

Nairobi: Tea factories will soon be allowed to sell their tea directly into the international markets without the need for middlemen, Cabinet Secretary for Agriculture and Livestock Development Mutahi Kagwe has revealed.According to Kenya News Agency, the strategy is among a raft of interventions being undertaken by the ministry to enhance the sustainability of the multi-billion tea subsector in the country. The reforms aim to promote tea value chains and make the local tea sub-sector globally competitive. Kagwe stated that these changes will supplement the government's marketing efforts, translating to increased earnings for tea farmers.Kagwe announced intensified efforts to penetrate emerging international markets for the export commodity. A high-level delegation comprising the Tea Board of Kenya (TBK), Kenya Tea Development Agency (KTDA), and East African Tea Association (EATTA) will be dispatched to key international markets in the Far East, Middle East, China, Russia, and India to aggressively market and promote Kenya's tea.An orthodox tea auction window will be opened within the Integrated Tea Trading System (ITTS), supervised by EATTA and the Tea Board of Kenya. As of July 2024, there were an estimated 100 million kilograms of unsold tea at the KTDA warehouse in Mombasa. The auction, set to open in June this year, is expected to help offload a substantial bulk of unsold orthodox teas to the global market.Kagwe, speaking at Gitugi tea factory in Othaya Nyeri County during the launch of the International Tea Day celebrations, emphasized the need for quality improvement in tea production. The event was themed 'Tea Industry Sustainability-Looking into the Future,' with Kagwe reiterating his commitment to ensuring that tea farmers receive necessary government support to maximize their earnings.He highlighted the ministry's focus on supporting the tea sector through the introduction of ICT and technology, soil testing, and activities by TBK. Kagwe stressed the importance of maintaining the high quality of Kenyan tea to fetch the best prices internationally.TBK Chief Executive Officer Willy Mutai expressed optimism about the interventions being implemented in the subsector, expecting them to result in better prices and steady markets. Last year, Kenya made Sh 215 billion from overseas tea sales, amid increased tea production from 570 kilograms in 2023 to 598 kilograms in 2024.Mutai noted efforts to sell all orthodox teas, with prices currently between USD 3.4 and USD 4. He expressed confidence that persistence could see prices rise to USD 10 in the Chinese market. KTDA Zone 4 Director David Ndung'u applauded the CS for efforts to attract new markets and recover the Iranian tea market, which is key to the tea subsector.Ndung'u praised the ministry's proposals to exempt tea packaging materials from tax in the 2025/2026 Finance Bill, which he noted will reduce production costs and boost farmers' earnings. He also proposed exempting the 16 percent Value Added Tax on local tea sales to encourage a spike in domestic consumption.Furthermore, Ndung'u called for the elimination of inter-county trade barriers and improvement of road networks to ease tea transportation. He noted that poor roads increase production costs, preventing farmers from fully enjoying their earnings.