Kenya: Ruto's Directive to Impact Tea Exporters' Margins

Multinational tea exporters are bracing for impact as the government announces plans to prohibit shipping of bulk tea, a move aimed at preserving the distinct identity of Kenyan beverage in international markets.

Speaking in Nairobi, President Ruto said the essence of Kenyan tea diminishes when it's marketed abroad without branding.

Currently, a significant portion--96 percent--of Kenyan tea is auctioned in bulk at Mombasa to overseas buyers, primarily for blending with teas of inferior quality from other nations.

President Ruto emphasised the necessity of establishing a unique Kenyan brand, lamenting the prevalent absence of Kenyan-labeled tea on global retail shelves.

The president singled out Lipton, a prominent purchaser of Kenyan tea at the Mombasa auction, questioning the authenticity of English tea, given England's lack of tea plantations.

Although the United Kingdom ranks as the third-largest importer of Kenyan tea, a substantial portion is re-exported to other destinations after value addition and branding, making Kenyan beverage to lose its mark of origin.

In efforts to rectify this disparity, Kenya recently had a discussion with major buyers like Lipton to develop a distinct Kenyan tea brand for improved market recognition.

Additionally, the government intends to establish a common user facility aimed at value addition, which includes packaging and branding initiatives to move away from exporting tea in bulk sacks.

President Ruto expressed discontent with the prevailing status quo, asserting that Kenya's reliance on exporting unprocessed tea undermines farmers' prospects for fetching optimal prices in global markets.

Despite Kenya's status as the world's leading tea producer, the absence of a recognisable Kenyan tea brand contributes to the nation's tea fetching lower prices compared to lesser-producing counterparts, according to President Ruto.

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