Garissa — The political crisis that has rocked Egypt in recent weeks has also triggered a major drop in Egyptian imports of Kenyan tea, a development that industry leaders say could have widespread economic ramifications for the East African nation.
"It is a classic case of Egypt sneezing and Kenya catching the cold," Kenya Tea Development Agency Holdings Ltd. Chairman Peter Kanyago told Sabahi. "Tea is the largest foreign currency earner for our country and the sector has caught flu that can be cured with resolving the crisis."
The upheaval in Egypt began when the military deposed President Mohamed Morsi on July 3rd. Nearly 1,000 people have since been killed in a series of clashes between his supporters and Egyptian security forces. More than 600 died on August 14th alone when the military moved in to clear Cairo camps occupied by members of Morsi's Muslim Brotherhood party.
According to Kanyago, Egypt's troubles threaten jobs in Kenya's large tea industry because the Egyptian market represents 30% of Kenyan tea exports. Tea earnings bring Kenya an average of 100 billion shillings ($1.14 billion) a year, he said.
Other countries that buy tea from Kenya include the United Kingdom, Uganda and Afghanistan, Kanyago said.
"Egypt was our top consumer before President [Hosni] Mubarak [was deposed] about two years ago," he said. At the start of 2013, Egypt dropped to being the third-largest consumer of Kenyan tea, but it has since fallen further to sixth place.
"We expected to recover after peaceful general elections that bestowed the presidency to Morsi. However, unfolding events threaten the livelihoods of Kenyans who rely on the sector because we do not have new markets," he said.
Trickle down effect:
Kenya exported 10 million kilograms of tea to Egypt during the first half of 2013, which accounted for more than a quarter of its total tea exports, Kanyago said.
Demand has gradually dropped since July and it stopped completely in mid-August, he said.
This month, commodity buyers from Egypt were missing from daily tea auctions in Mombasa, Kenya Tea Buyers Association Chairman Njau Kiarie told Sabahi.
"We have been buying tea from farmers so that we can sell, but we now buy less because Egyptians who have been coming to the tea auctions are not even making inquiries about the tea, much less making an appearance at the auction," he said, adding that the price for a kilogram of tea has dropped significantly.
At the auction, a kilogram of raw bulk tea now costs 220 shillings ($2.50) and a kilogram of processed tea is 550 shillings ($6.50), representing a 20-shilling ($0.23) drop since July, according to Kiarie.
Kenya sold close to 22 billion shillings ($252 million) worth of tea to Egypt alone in 2012, he said.
The implications of the decline will soon trickle down to farmers because the association will have to buy less tea from growers, Kiarie said.
Alfred Ontiri, 46, a tea farmer in Nyatieko village, Kisii County, said there were already signs that growers will be limited in how many kilograms of tea they can deliver to tea collection points.
"We already face the high cost of production and a dwindling market is the last thing we are prepared for," he told Sabahi, adding that he depends on tea farming to feed his family of six.
"The crisis in Egypt and lack of new markets for the produce is discussed in low and gloomy tones in my village," he said. "Everyone is concerned, but we are hopeful."
"My interest is peace in Africa so that we can market our produce for prosperity," he said. "If the sector is doomed, it will affect the majority of Kenyans."