Kenya’s Tea Sector Faces Critical Moment
In a decisive move to safeguard the future of Kenya’s tea industry, the Tea Board of Kenya (TBK) has instructed every tea factory nationwide to submit detailed reports of unsold tea inventories and their valuations as of April 30, 2025. This directive arrives against a backdrop of steadily declining export prices that threaten the livelihoods of thousands of smallholder farmers and the financial health of factory owners.
Why Stock Disclosure Matters Now
Global tea prices have taken a downward turn over the past year, squeezing profit margins at every level of the supply chain. For Kenyan producers, where rising production costs collide with lower sale prices abroad, the pressure has never been greater. Unchecked stockpiles of unsold tea can hide the true scale of the crisis and delay urgently needed support. By requiring transparent disclosure of unsold quantities and current market values, TBK aims to:
- Assess the Scale of Unsold Inventories
Pinpoint how much tea remains in factory warehouses after months of sluggish demand. - Evaluate Financial Exposure
Understand the valuation of these stocks at today’s depressed market rates. - Guide Sector Support
Use real data to design targeted interventions that shore up factory revenues and protect farmer incomes.
TBK Chief Executive Officer Willy Mutai emphasized the urgency of the measure. “The Ministry of Agriculture and Livestock Development is deeply concerned about the continued decline in international tea prices and the negative effect this may have on the income of factories and earnings for tea producers, especially smallholder farmers,” he explained in the circular issued on May 12, 2025.
A Tight Deadline for Compliance
Factories have until May 23, 2025 to submit their stock and valuation reports. This compressed timeline underscores the gravity of the situation and the need for swift action. In July 2024, the Kenya Tea Development Agency (KTDA) revealed that an estimated 100 million kilos of tea lay unsold in Mombasa warehouses. Without accurate, up-to-date figures, that backlog could easily grow, deepening the financial strain on growers and processors alike.
Challenges and Government Interventions
Kenya prides itself as one of the world’s largest tea exporters, yet unstable global prices have repeatedly undermined returns for local farmers. While production costs continue to climb, export revenues have not kept pace. To help cushion the blow, the government has taken several key steps:
- Direct Sales for KTDA Factories
Allowing KTDA-managed factories to sell tea directly to international buyers, bypassing costly intermediaries. - Removal of Packaging Material Taxes
Eliminating taxes on local packaging materials to enable factories to brand and package Kenyan tea at home rather than exporting raw leaves for processing abroad. - Potential Financial Support
Using the newly collected stock data to craft financial relief packages, low-interest loans or export incentives tailored to areas of greatest need.
Agriculture Cabinet Secretary Mutahi Kagwe highlighted the value of local processing. “Kenyan tea no longer needs to be exported to Dubai for packaging. With the tax on packaging materials removed, factories can now add value locally and enhance the market appeal of Kenyan tea.”
Looking Ahead: Data-Driven Solutions
Once TBK compiles the April 30 data, stakeholders will meet to analyze the findings and map out next steps. Possible interventions include:
- Price Stabilization Funds
Creating a buffer to support minimum farm-gate prices during periods of extreme market volatility. - Warehouse Financing
Offering loans secured by unsold tea stocks so factories can meet obligations and avoid distress sales. - Market Diversification
Assisting exporters to access new markets in Asia, the Middle East and Europe to reduce reliance on traditional buyers. - Value Addition Initiatives
Investing in on-site blending, packaging and branding facilities to capture higher margins.
For Kenya’s smallholder farmers, who contribute a large share of national tea output, these measures cannot come soon enough. Transparent reporting will allow policy makers to identify regions most at risk and channel support where it will have the greatest impact.
Securing the Future of Kenyan Tea
The TBK stock disclosure directive is more than an administrative exercise. It marks a turning point in how Kenya’s tea industry confronts market challenges. By shining a light on unsold inventories and valuing them in today’s market, the Tea Board of Kenya will equip decision makers with the insights needed to protect farm incomes, stabilize factory operations and ensure that Kenyan tea remains a trusted export brand around the world.
Farmers, factory managers and exporters now face a high-stakes countdown to May 23. Their collective response will determine whether Kenya’s tea sector weathers this price storm or succumbs to mounting economic pressures. With transparent data as the foundation, however, Kenya can chart a course toward resilience and renewed growth.
Stay updated with the latest farming tips and agriculture industry news from Africa by subscribing to our newsletter. Don’t miss out on valuable insights and updates. Follow us on Twitter, LinkedIn, and Facebook to join our farming community and stay connected with us.
