Kenya’s tea auction sees surge in unsold stocks as export levy raises competitiveness concerns 

KENYA – The volume of unsold tea at the Mombasa Tea Auction has risen to its highest level this year, raising concerns within Kenya’s tea industry over the impact of new taxation measures and weakening demand in key export markets. 

Latest auction data shows that a significant portion of tea offered for sale failed to attract buyers, with exporters linking the trend to the government’s 1.5% export and investment promotion levy, which they say has increased the cost of Kenyan tea in a highly competitive global market. 

The development comes as Kenya, the world’s largest exporter of black tea, continues to face shifting global demand patterns, currency pressures in importing countries, and increased competition from producers such as India, Sri Lanka, and Uganda. 

According to the East African Tea Trade Association (EATTA), unsold tea volumes at the Mombasa auction have steadily increased in recent weeks, reaching the highest level recorded since the start of the year. 

Industry stakeholders warn that prolonged weakness in auction demand could affect earnings for farmers and tea factories if buyers continue scaling back purchases or pushing for lower prices. 

The concerns are largely centered on the export levy introduced as part of government efforts to raise revenue and support export promotion initiatives. Exporters argue that even a modest levy has had a significant impact on pricing competitiveness. 

One trader quoted by Business Daily said the additional charge is affecting Kenya’s position in global markets. 

“The levy is increasing the cost of doing business and ultimately affecting the competitiveness of Kenyan tea in export markets,” the trader said. 

Industry players say buyers are increasingly comparing Kenyan tea prices with those from competing origins, forcing some to reduce purchase volumes or negotiate lower prices. 

Despite the slowdown at the auction, Kenya continues to maintain strong production levels and earns more than Sh180 billion annually from tea exports, making it one of the country’s leading foreign exchange earners alongside horticulture and tourism. 

However, stakeholders caution that sustained increases in unsold volumes could place downward pressure on prices, reducing returns for farmers across the value chain. 

The tea sector supports millions of livelihoods through farming, processing, transport, and export activities, making its performance critical to rural incomes. 

The challenges mirror broader concerns across Kenya’s export sectors, where producers have raised alarms over rising operational costs, taxation, and global economic uncertainty affecting competitiveness. 

Industry leaders are now calling for consultations between the government and stakeholders to reassess the levy and protect market access in key destinations including Pakistan, Egypt, the United Kingdom, Sudan, and the United Arab Emirates. 

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