Losses hit over Ksh.3 billion as Iran conflict disrupts Kenyan tea exports

The war in Iran is rattling diverse sectors of the economy, with tea exports grinding to a halt following the blockage of shipping routes.

Tons of Kenya’s tea, estimated at billions of shillings and destined for the Middle East, are stuck at the Port of Mombasa.

According to the East African Tea Traders Association (EATTA), the sector has lost an estimated Ksh.3.1 billion in foregone business as consignments remain at the port due to the blockage of shipping routes caused by the conflict involving the US, Israel, and Iran.

“This has created a lot of congestion at the Port of Mombasa because our buyers bought tea before the war, and this tea could not leave due to the disruption of the shipping routes,” said EATTA Director George Omuga.

Ships scheduled to ferry the tea overseas have cancelled their journeys, leaving the tea industry stranded. About 40 per cent of Kenya’s tea market is in Pakistan, and continued blockage of shipping routes through Pakistan’s Salala port is likely to deal the country a further blow.

“If this conflict spreads to Pakistan, we will lose over 65 per cent of our export tea market. We lose about 8 million dollars every week,” Omuga stated.

The foreign sales body, Kenya Export Promotion and Branding Agency (KEPROBA), has called on stakeholders in the tea sector to urgently develop strategies to find alternative markets, particularly within Africa.

“This is an opportunity for Kenyans to look for new markets, especially in the African continent. There is the African Free Trade Market Agreement, which can be used as a mitigator,” KEPROBA CEO Floice Mukabana stated.

About 20 per cent of Kenya’s leaf tea is exported to the United Arab Emirates, a challenge that has already caused price adjustments of Kenyan tea in Gulf states.