19 January 2016

Kenya: Make Tea Auction Transparent, President Tells Traders

press release

President Uhuru Kenyatta has urged tea auctioneers to ensure farmers get a return from the crop.

He asked the East African Tea Trade Association to provide incentives to encourage farmers to continue growing tea instead of converting their farms to real estate business.

"We are leaving in an environment where farmers are beginning to have options on what to do with their land. It would be a big mistake if we were to say that because of poor pricing, prime tea land is converted into apartments and shopping malls," President Kenyatta said when he visited the Mombasa Tea Centre.

He added: "The only way we are going to stop that is by ensuring that even though it is a willing buyer willing seller market, we are conscious that a farmer out there has inputs and other bills to pay for."

The President said it would not be helpful to traders or the country if farmers gave up growing the crop, saying tea is one of Kenya's major foreign exchange earners.

The President disclosed that during his visits abroad, he has put a strong case for Kenya to expand the market for the crop. He pointed out that Nigeria and China have expressed key interest.

The Head of State called on the East African Tea Trade Association to speed up the automation of the Mombasa Tea Auction to ensure transparency and accountability for the benefit of the farmer.

"I think automating your system will go a long way to dispel some of the perceptions that this is a house of collusion. People believe that you just come here to showcase, but the real deals are done at night," President Kenyatta said.

The President's comments on automation were in response to the association's chairman, Mr Nicholas Munyi, who had said plans were at an advanced stage to automate the tea auction.

Mr Munyi said the Mombasa Auction Centre was unique in Africa as it was dollar-dominated, making it convenient for the international market.

"The payment is made to tea producers within nine working days. It is the only multi-origin auction centre handling tea from 10 producer countries. This is a benefit as it offers the buyer a variety of teas," Mr Munyi said.

He said tea farming was brimming with optimism as the prices had peaked to $2.78 (Sh278) a kilo up from $1.8 (Sh180) in 2014.

To get better prices, Mr Munyi expressed the need for farmers to diversify tea products - orthodox and green tea - to tap into new markets such as Algeria.

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