Stakeholders in the tea industry have warned of huge losses of more than Sh6.5 billion every year as a ban on Kenya's exports to the Sudanese market persists.
Tea dealers are now urging the Kenyan government to urgently address the diplomatic fallout with neighbouring country to enable them to resume exports to one of their key outlets.
Mr Peter Kimanga, a director of the Kenya Tea Development Authority (KTDA), said Sudan has a unique market since it primarily imports specific tea grades that are not easily absorbed by other buyers.
“With the ban being extended after the window to clear tea on the supply chain, Kenyan tea farmers reel as Sudan ban threatens bonuses and livelihoods since tea traders and merchants still have valid contracts,” said Mr Kimanga.
Mr Harry Kumbe, a tea dealer in Mombasa, said traders with active commercial contracts will incur losses projected at Sh6.5 to Sh7 billion annually if the standoff is not resolved.
“When Agriculture Cabinet Secretary Mutahi Kagwe visited the Mombasa Tea Auction last week, we were shocked that he did not address the Sudan issue, but instead focused on the Iranian market. The Sudan market is easy to access with less payment bureaucracy considering sanctions in Iran,” he said.
The Sudanese government banned all imports in March this year in protest after the paramilitary Rapid Support Forces (RSF), who are fighting the army in a two-year civil war, were hosted in Nairobi. Sudan's military government said the ban was to preserve the country's sovereignty and "protect its national security."
Sudan, in June this year, granted Kenya a tiny window for Kenya tea dealers to sell about 400 bags of tea, which were already on transit at Port Sudan when the ban was effected.
Despite being allowed to clear the containers, tea dealers have expressed deep concern over the impact of the top-five export markets for Kenya, saying it will lead to serious cash flow difficulties, which will inevitably affect producers and smallholder farmers.
Last week, Mr Kagwe said Kenya and Iran formed a joint committee to resolve trade barriers, oversee the resumption of tea exports to Iran within 60 days, with the first 30 days already collapsing, but remained silent on the Sudan tea market issue.
“We have less than 30 days for the committee to unlock the Iran tea market since the crop remains Kenya’s leading export to the Middle Eastern nation, accounting for over 90 per cent of bilateral trade,” said CS Kagwe.
Iran has renewed their commitment to strengthening trade relations, with Kenyan tea exports to Iran reaching Sh4.2 billion ($33 million) in 2024.
