By The News Booth Desk
Kenya’s tea sector is grappling with significant financial losses, estimated at Ksh3.1 billion, due to disruptions in key export routes linked to the ongoing geopolitical conflict between Iran and the United States. This crisis has severely impacted shipments to the Middle East, which is one of Kenya’s largest markets for tea, causing supply chain bottlenecks and slowing down trade flows.
Impact of geopolitical conflict on tea exports
According to the East African Tea Trade Association (EATTA) managing director, George Omuga, Kenya typically exports about two million kilograms of tea to the Middle East every week. However, the current tensions have disrupted shipping routes, particularly through the Port of Salalah, a crucial logistics hub for the region. This disruption has resulted in between six and eight million kilograms of tea being stranded at the Port of Mombasa and in warehouses, awaiting clearance and shipment.
“About 65 percent of tea exports have been affected due to the disruption of shipping routes in the Middle East, leading to significant losses in the sector,” Omuga stated. The situation is dire as industry stakeholders estimate that the value of tea exports lost over the past three weeks stands at approximately $24 million, equivalent to Ksh3.1 billion.
Consequences for the Kenyan economy
The Middle East remains a critical destination for Kenyan tea, with Iran and Pakistan among the leading buyers. The ongoing instability in the region poses a threat to the sector, which is a major foreign exchange earner for Kenya. Exporters are warning that prolonged instability could further erode earnings and destabilize the sector.
Omuga made these remarks in Mombasa during a stakeholders’ meeting convened by the Kenya Export Promotion and Branding Agency (KEPROBA). During the meeting, industry players called for urgent interventions to cushion exporters from escalating losses. They emphasized the need for government support to navigate the challenges posed by the geopolitical tensions.
Call for government intervention
Analysts caution that the continued disruption could have ripple effects across the broader economy. The tea sector is not only vital for foreign exchange but also supports the livelihoods of smallholder farmers, logistics firms, and other businesses tied to tea exports. The potential for prolonged disruptions could lead to reduced income for farmers, increased operational costs for logistics companies, and a decrease in foreign exchange inflows.
As the situation unfolds, stakeholders are closely monitoring developments in the Middle East, hoping for a resolution that will restore stability to the shipping routes and mitigate further losses. The tea industry remains a cornerstone of Kenya’s economy, and its resilience in the face of such challenges is crucial for the country's economic health.
