Tea auction up as sector eyes new markets

The tea auction absorption has risen to 84 per cent, up from 51 per cent during the same period last year, highlighting stronger market uptake and improved demand despite ongoing challenges in the tea sector.

Last year, government pricing policies caused a large build-up of stock at the Mombasa Tea Auction. Of the 900 million kilogrammes (kgs) offered, only 492 million kilos were purchased.

This year, however, only 16 per cent of tea remains as outlets, some weeks dropping to as low as five per cent.

East Africa Tea Trade Association Managing Director George Omuga attributed the increase to the Mombasa Tea Auction, which continues to maintain stability in both volumes and prices, contributing to the stronger absorption rate.

He said 410 million kilos have been sold so far, slightly lower than last year’s 445 million kilos due to reduced older stock, with KTDA East of Rift Valley and Rwanda fetching the highest average prices at $2.98 (Sh387.40) and $2.92 (Sh379.6) respectively.

Omuga commends the sector’s advocacy efforts for bringing about beneficial changes.

“We successfully halted the Sh375 cleaning charge on tea exports and worked with the Kenya Revenue Authority (KRA) to clarify tax issues affecting our members,” he says.

He stated that persistent lobbying by the sector has helped eliminate taxes on tea packaging materials, the changes reflected in the Finance Bill and Act 2025, and also led to a reduction in Kenya Ports Authority charges that had been hindering tea exports. Speaking during the National Tea Stakeholders Forum in Nairobi, Omuga said the association continues to collaborate with Kenya Trade Network Agency (Kentrade), the Maritime Authority and the Shippers’ Council to address trade challenges.

The forum brought together stakeholders from 10 member countries, including Kenya, Rwanda, Burundi, Uganda, Tanzania, DRC, Malawi, Madagascar and Ethiopia.

“Our community is expanding, as shown by 32 new registrations this year and the onboarding of DTB as a new settlement bank, which aims to enhance financial services for our members.”

He said the ongoing export market strategy aims to expand markets in China, Iran, the CIS, Europe and Morocco, noting that the successful launch of the Orthodox Expo and the Orthodox Tea Auction was major milestones.

Producers’ Association Chairman Richard Koech said the sector has lost markets and is working with the State to reopen them. “Certification is extremely expensive, as one producer may pay over Sh2 million for a single certificate. Besides the cost of obtaining certification, the ongoing operational requirements are also costly,” Koech regrets.

He linked last year’s low auction prices to oversupply, favourable weather and government price ceilings that depressed absorption.

He also criticised county governments for imposing levies unrelated to any service, including charges on tea crossing county boundaries or entering Mombasa.

However, Hussein points out climate change, regulatory hurdles, fluctuating global prices, high production costs and growing competition as significant challenges, particularly for smallholder farmers with limited access to finance and technical support.

He sees opportunities in speciality and high-quality teas, which align well with Africa’s unique growing conditions. Value addition, such as flavoured and ready-to-drink teas, could help attract younger consumers and raise farmer earnings.

“By focusing on value addition such as flavoured and ready-to-drink teas, we can enhance our market appeal to the Gen Zs and increase profitability for farmers,” he says.

He also says, the African Continental Free Trade Area offers potential to expand intra-African trade and reduce reliance on traditional markets.

Hussein expresses optimism about the sector’s future, calling for innovation, sustainability, stronger farmer welfare, and deeper partnerships with international buyers while safeguarding existing markets.

Omuga says the sector engaged with the Uganda Tea Association and hosted Sri Lankan tea stakeholders locally, facilitating key factory visits. The sector also played a role in mediating the release of tea shipments held at Port Sudan due to restrictions.