Kenya: Bomet to Export 200 Tonnes of Tea to Iran Every Month

11 October 2021

Farmers, through their cooperative societies and private factories, clinched a deal in Iran to export 200 metric tonnes of tea per month in what was facilitated by the county government of Bomet.

More players are expected to loop into the deal that is expected to shore up earnings by the small scale tea growers in the South Rift region.

This comes as Bomet Governor Hillary Barchok allayed fears that it would be difficult to remit money to Kenyan traders after the US imposed sanctions in the Islamic Republic of Iran.

"The embargo imposed on Tehran by the US does not affect foodstuffs and drugs. As such, the trade deal will be actualised with money remitted to the cooperative societies and private tea factories on board," said Dr Barchok.

The direct sale of tea bypassing the Mombasa Tea Auction is more lucrative to the players with a kilogram of black CTC tea selling for a minimum of 3 US dollars.

Food products

The tea exported from Bomet is stocked at Etka Organisation Company Limited chain stores, a leading chain store for food products in Iran.

Black CTC tea which is popular in the local and foreign market is processed through cutting, tearing and curling, but there has been a sharp increase in demand for orthodox tea in the export platforms.

The 84 metric tonnes of tea exported by Bomet County on June, 25 this year, was sold for Sh27.7 million ($ 252,000) translating to Sh90 per kilogram more than what it fetched at the Mombasa Tea Auction.

The tea was sold for Sh330 ($3) per kilogram while the current prevailing price in Mombasa Auction is Sh235 ($2.18) per kilo according to the devolved government unit and directors of companies involved in the deal.

Bomet County rode on a ruling on May, 20 this year by Justice Roselyne Korir suspending full implementation of the Tea Act 2020, barring direct sale of the produce and tying all players to go through the auction, to push the deal though.

The delegation told a press conference at the Bomet County headquarters that once the Food and Drugs Association (FDA) certifies the produce as safe for consumption and sale in Iran, the purchase price will be raised with the tea currently retailing for Sh900 a kilogram in outlets at Tehran.

"We found that Iran consumes 120 million kilograms of tea a year yet we only export 20 million kilograms? Why are we not bridging the gap yet we have the potential to ship out 100 million kilograms?" said Ambassador (retired) Joshua Terer.

Mr Terer, who is a director of the Mau Multi-purpose Tea Cooperative Society with 5,400 shareholders, said even before the Iran deal was sealed, the company was already selling 30,000 metric tonnes of tea per week to other foreign markets.

Modern technology transfer

Mr Benard Soi, a director with Tet Tea factory said there were opportunities for Kenyans to do business in Iran with focus on modern technology transfer in agricultural production.

"We are businessmen and we have no interest in politics. All we are asking the county and national governments is to create an enabling environment for us to trade, create job opportunities for Kenyans and earn the country the much needed foreign exchange," said Mr Soi.

The governor said the national and county government should be facilitating the farmers to move away from traditional markets including the United Kingdom, Sudan and Egypt and explore new frontiers.

"As a county, we are also seeking to sell our produce to Eurasian Economic Union (EEU), whose market has not fully been exploited by the Kenya Tea Development Agency (KTDA) despite the fact that the traditional markets has been rocked by uncertainties and dwindling demands," said Dr Barchok.

He urged Agriculture Cabinet Secretary Peter Munya to ensure that the national government expands the market fronts for the tea farmers.

Mr Munya has been involved in a spat with Dr Barchok over the deal claiming it was not sanctioned by the national government, the Tea Board of Kenya (TBK) and that the Kenya Tea Development Agency (KTDA) had been bypassed.

The CS claimed that direct sale of tea would re-open the opportunities for brokers to hide the total earnings from farmers, thus further impoverishing them.

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