The Kenya Tea Development Authority (KTDA) is warning of a major crisis in the tea sector due to the escalating Middle East crisis and the move to increase fuel prices in the country.
According to the authority, the country was currently holding tea worth over Ksh 3 billion in their warehouses due to the shipping crisis caused by the Middle East war.
This came as the authority warned that the long awaited farmers bonuses in the next two months could fall by up to Ksh 10 per kilo due to the crisis and the high fuel prices.
In the last four months, air and ship freights across the Middle East have been affected by the US, Israel and Iran war, a move that has been worsened by an increase in fuel prices.
According to KTDA national chairman Enos Njeru, the lucrative sector that supported over 800,000 families was facing losses running into millions of shillings.
He said that shipping out tea mainly to the main market in Pakistan was a major challenge after major shipping companies pulled out due to the Middle East crisis.
“Currently we are holding tea worth over Sh3B in our warehouses due to lack of shipping transport and we fear things could get worse in the coming days,” he warned.
Njeru further noted that shipping lines had introduced new surcharges targeting importers as one way of protecting their ships.
Addressing the press in Naivasha during the authority training, he said that the current situation had been worsened by the move by the government to raise fuel prices.
He said that this would hurt the cost of production and transport meaning a reduction in bonuses set to be paid in the next two months.
While calling for State support and subsidies, Njeru warned that gains made in the sector for years could be eroded by the current fuel crisis.
“Tea is one of the sectors that is highly taxed in the country despite raking in billions in foreign exchange and we are asking the government to review some of the levies,” he said.
The authority Vice-Chairman Engineer Simon Musonik added that they were also concerned by the high cost of labor and a rise in the prices of farm inputs like fertilizer.
“As we grapple with the high cost of labor, we have been hit by shipping and fuel crisis and we are calling on the government to put some austerity measures to cushion famers,” he said.
