Kenya's tea earnings rise to Ksh.218.8 billion amid Middle East crisis

The latest industry report, however, shows that global oversupply and weak prices continued to weigh on returns.

And with farmer earnings still under strain, the focus is now shifting to whether ongoing reforms can stabilize prices and improve income, at a time of global unrest.

The tea sector remained stable in 2025, with total earnings rising slightly to Ksh.218.8 billion. Export earnings climbed to Ksh.186.9 billion, supported by a near 10 per cent jump in export volumes to 652.8 million kilogrammes.

“The increase in shillings from last year to this year is some Ksh.5.22 billion which is a fantastic record,” said Mutahi Kagwe, CS, Agriculture and Livestock Development.

This growth, however, came against a fragile global backdrop. A bumper harvest in 2024 left the market oversupplied, while conflicts in key regions, including the Middle East, weakened demand and kept prices under pressure.

Key traditional markets such as Pakistan and Egypt posted steady growth, while emerging markets including Kazakhstan, Japan and Ireland recorded sharp increases in demand.

“Kenyan tea reached 100 destinations in 2025, compared to 96 markets in 2024,” Kagwe noted. 

Even so, rising tea stocks at Mombasa auction and weak prices continue to weigh on farmer earnings, highlighting the gap between higher volumes and actual returns.

To address this, the government has rolled out reforms including a Ksh.3.7 billion concessional loan for factory upgrades, cost-cutting measures, and tax incentives.

“We are establishing a state of the art laboratory in Mombasa that is aimed at validating the quality of tea through scientific analysis. The lab will also perform microbiological analysis of heavy metal contaminants, pesticide residues and emerging contaminants to ensure conformity with market requirements,” the CS highlighted. 

The government stated that it is aiming to raise smallholder earnings to 100 shillings per kilogramme by 2027, but with global markets already under pressure, and geopolitical risks rising, the question now is whether demand will hold.

“Disruptions to key shipping routes, rising freight and insurance costs and weakening trade arrangements such as the 5.6 billion bilateral agreement with Iran are likely to reduce export volumes and earnings,” said John Mbadi, CS, National Treasury and Economic Planning.