All the regional teas are marketed at the Mombasa Auction by the Eatta before they are shipped out to overseas markets.
Low quality teas and alleged mismanagement have left the Mombasa Tea Auction with over 100 million kilos, placing the world’s second-largest market for black tea in the worst position yet – way above the 40 million-kilo minimum stock required in the stable international tea market.
The business continues to grapple with tea stocks, driven by the high volumes of the commodity carried over from previous years, reaching three times more above international requirements.
Over 119 million kilos were rolled over to this year. This is the first time Mombasa, which is the second-largest black tea auction centre in the world after Colombo in Sri Lanka, is rolling over huge volumes of tea, with traders and government blaming market mismanagement and cartels in the industry.
Kenya’s Deputy President Rigathi Gachagua recently accused the management of the Kenya Tea Development Agency (KTDA), which handles more than 90 per cent of traded tea, of misappropriating farmers’ funds with little to show as output.
Mr Gachagua said audits had revealed that the management is not doing enough to ensure farmers get good prices and dividends from the cash crop, despite the government spending billions on subsidising farm inputs.
"It leaves one to wonder how the agency can spend more than $4,000 in foreign travels alone between January to June this year -- that is why we need to check their expenditure," Mr Gachagua said. "This is farmers’ money, and Kenyan taxpayers’ money... Expenditure management and excesses must be checked.”
But Principal Secretary in the State Department for Agriculture, Dr Paul Ronoh, attributed the huge volumes of unsold tea to high production of low quality tea.
"Buyers at the Mombasa tea auction last year rejected more than 100 million kilos due to prices deemed too high, relative to its value, which potentially impacted farmers’ earnings in the just-concluded financial year," Dr Ronoh said.
As a result of high production and low-quality tea, Kenya suspended the $2.4 minimum reserve price, allowing traders to buy below $2 per kilo of tea.This has made Kenyan tea lose its value on the market, compared with Rwanda’s, which now fetches the highest price.
Market data by the East African Tea Traders Association (Eatta) shows that Rwandan tea fetched $4.02 a kilo in the September sale, against Kenya’s tea at $2.21, Burundi’s $2.24, Uganda’s $1.27 and Tanzania’s $1.15 for the same quantity.
The value of Rwandan tea has been on an upward trend since the beginning of the year, on the back of high demand.
Data indicates by the end of financial year 2018/2019, Rwandan tea producers had exported 30.573 metric tonnes from a total area 27,112 hectares, from which they generated $ 83,552,108. The country targets to increase its total export volume to 65,099 metric tonnes by the end of this year, targeting to generate $209 million.
All the regional teas are marketed at the Mombasa Auction by the Eatta before they are shipped out to overseas markets.
The association used to trade tea from at least 12 African countries before the Covid-19 pandemic, but the number of participating states has fallen to five, as supplies from Zambia, Malawi, Madagascar, Zimbabwe and DR Congo were cut by logistical challenges.
By June this year, Kenya had offered the largest volumes of tea (232,574 packages) while Rwanda offered best quality teas at 13,200 packages.
During the period, Uganda offered 26,080 packages and Burundi 3,160 packages, while Tanzania offered the least volumes with 1,640 packages.