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See why Kenya has been losing $2 million per week

A tea farm in Kenya
  • Kenya's tea industry faces instability as insecurity causes losses of nearly $2 million weekly.
  • Tanzania signals market shift as insecurity in Kenya prompts consideration to move tea auction venue.
  • Concerns mount over the future of the Kenyan tea Industry as large-scale producers suspend operations due to insecurity.

With claims that Kenya is losing nearly $2 million per week at the Mombasa tea auction due to insecurity in growing zones that has caused the suspension of operations by important producers, instability and uncertainty in the country's tea business have increased.

After Sri Lankan Browns Investments Plc agreed to purchase James Finlay Kenya's tea plantations business, Tanzania signaled its desire to move the market venue for its teas from the Mombasa auction to Dar es Salaam.

Finlay Industry watchers are concerned about the future of the crop in Kenya. In accordance with the terms of the selling agreement, Browns and Finlay will transfer 15% of the stock to a locally run cooperative.

Business at Mombasa Tea Auction has been impacted by the continuous business interruptions in large-scale tea grower farms in Kenya's South Rift districts, and if the current scenario continues, the nation is anticipated to lose more money in the next tea sales.

The board of the East Africa Tea Trade Auction (EATTA), which oversees the Mombasa Tea Auction, said that the invasion of tea farms in the Kenyan highlands has had profound effects on the economy and that a decrease in the supply of teas for the auction is anticipated.

The issue has gotten worse after Ekaterra Tea PLc, previously Unilever, declared the suspension of its activities in the counties of Bomet and Kericho due to residents' invasion and property destruction. The firm said that they were compelled to halt operations as a result of recent demonstrations and looting at its tea farms in the counties of Kericho and Bomet by alleged criminal gangs.

Large tea growers working in the counties of Kericho, Bomet, Nyamira, and Nandi have reportedly threatened to reduce their operations as a result of the increased insecurity, according to EATTA.

According to Arthur Sewe, the head of the EATTA board, Kenya stands to lose more than $2.5 million per week if all the tea farms are closed and the Mombasa Tea Auction activities are stopped. “It is important to note that tea plantations in this country account for 40 percent of the volume traded in the Mombasa auction. If they (plantations) stop presenting their tea in the auction, we foresee a catastrophic impact on the Mombasa Tea Auction,” he said.

The Federation of Kenyan Employers (FKE) has urged the government to address the security situation, claiming that raids and thefts at large-scale tea producer farms have now progressed to organized assaults on commercial properties and the purposeful destruction of valuable assets.

“Given the ramifications of these incidents on our economy, large-scale tea producers, and their workers, we call on all parties to embrace social dialogue. We urge them to show commitment and tolerance towards resolving the dispute that has since caused the suspension of operations of some large-scale tea producers,” said the federation in a statement.

Hussein Bashe, Tanzania's minister of agriculture, has already informed the legislature that the country will begin selling its tea in June at the Dar es Salaam Auction. Tanzania Mercantile Exchange would hold the auction using an online platform. Tea will be purchased by local blenders at the Dar es Salaam auction, and those who have direct markets will need to register there in order to be recognized as permit holders.

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