Orthodox tea to fetch better earnings

Agriculture Cabinet Secretary Mutahi Kagwe with KTDA Holding Chairman Chege Kirundi in a recent function. [Boniface Gikandi, Standard]

Orthodox tea farmers would fetch good prices following the launch of its sale at the Mombasa Tea Auction that for years has set prices for black tea through a competitive bidding process.

Traders at the auction were optimistic that the Orthodox tea will trade between Sh390 and Sh1,300 a kilo at the auction, up from last year's price ranging between Sh442 and Sh540.

Data from the government shows that the orthodox tea fetched better prices compared to the country's traditional black CTC tea currently trading at Sh296.

Prices at the auction have been affected in recent years by U.S. sanctions against Iran, global superpowers' trade wars and Sudan's recent ban on tea imports. In the middle of this year, Khartoum banned most of the imports from Kenya to protest the hosting of the paramilitary Rapid Support Forces (RSF) in Nairobi.

The Iranian market was also affected by the U.S. sanction on Tehran against the use of the dollar. In the past, Kenya tried to lobby for the use of other currencies at the auction.

Yesterday, Agriculture Cabinet Secretary Mutahi Kagwe said the government was engaging in high-level discussion to allow Kenyan tea into the Iranian market.

The CS witnessed the first-time sale of 2,925 packages, equivalent to 91,798 kilos of orthodox teas at the Mombasa Tea Auction.

Kagwe said that Kenya's traditional mainstay CTC teas face flat demand and depressed prices at the Mombasa Auction because of the changes in the global tea market.

He said that the mismatch between production and consumption has led to unsold stocks and lower earnings, despite the excellent work of 650,000 tea farmers in this country.

The CS said the government is spearheading reforms to diversify into orthodox and speciality teas, a lucrative niche growing by six per cent annually and currently dominated by Sri Lanka, India, and China. "These teas are expected to fetch between $3 and $10 per kilo, delivering better earnings for farmers and raising Kenya's profile in global speciality markets," said Kagwe.