Market News

Kenya Expands Its Tea Export Market To West And Central Africa

BY Jane Muia · October 6, 2022 09:10 am

The first consignment of Kenyan tea is set to leave the country for Ghana on Wednesday, under the African Continental Free Trade Area (AfCFTA) guided trade initiative.

The initiative is being driven by the AfCFTA secretariat, the Kenya Tea Development Agency (KTDA), and the ministry of trade.

The initiative will expand Kenya’s tea markets to West and Central Africa. Kenya is among other six nations that were selected to pilot the free continental trade pact. The initiative seeks to unlock the movement of goods and services in Africa to help nations conduct trade beyond the existing trade barriers.

Other nations that were selected are Tanzania, Tunisia, Cameroon, Egypt, Mauritius, and Ghana. Names of these countries were announced during the 9th meeting of the AfCFTA Council of Ministers held in Ghana in July 2022.

Kenya identified several products that can enter the markets of the pilot markets. These products include textiles, milk, cheeses, and horticulture products.

Trading under AfCFTA was commissioned in January last year, but its implementation was derailed as problems regarding rules of origin remained unresolved. Each trading bloc has its own Common External Tariff, which it charges on goods coming outside a given region, and origin issues made it difficult for nations to identify the products that could enjoy the preferential tariff regime under the agreement.

Kenya is a member of the East African Community (EAC), while Ghana belongs to the West Africa bloc. EAC members charge up to 50 percent tax on goods imported from other regions. AFCFTA is the largest free trade zone in the world and covers 54 African countries.

Tea Prices

The entry of Kenya’s tea to the central and West African markets is likely to improve the leaf’s earnings which have been recording a mixed reaction in the last couple of months.

Last week the commodity fetched $2.27 (273.99 shillings) per kilo at the Mombasa auction, an increase from the $2.25 (271.57 shillings) fetched during the previous sale. the strong price came despite reduced demand from key buyers such as Pakistan. The country is the biggest buyer of Kenya’s tea, taking up 38 percent of the total weekly sales at the Mombasa Tea Auction.

Pakistan has since June cut its tea consumption citing financial uncertainties. In addition, the South Asian country has witnessed extreme weather conditions since the start of the year, with recent floods leaving a third of the country underwater and leading to a humanitarian crisis.

Tea is among Kenya’s leading exports and has been hailed for earning the country high revenue alongside the horticulture sector. Last year, tea accounted for about 19.6 percent of the total domestic exports valued at 130.9 billion shillings.

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