Severe winter in the West boosts Kenya tea exports

Tea was however only added to the list of products covered under the programme in 2004, effectively opening up avenues for smugglers.

The Pakistani’s have even demanded that tea sales to Afghan buyers be vetted, a position Kenya has ruled out citing the free market economy. Kenya instead looks up to stepping up lobbying for a review of the import duty charged on tea by Pakistan to help curb the vice.

“There is very little we can do in terms of regulating what volume goes into Afghanistan because its an open market system and everyone has a right to buy from anyone but we have resolved to continue lobbying Pakistan to lower the import duty on tea that enters its market,” Mrs Kariuki told Business Daily in a past interview.

Pakistan currently charges 10 per cent import duty, alongside a 15 per cent sales tax and an additional 10 per cent value-added tax and another two per cent income tax on imported tea.

Smugglers charge between 15-20 per cent overall duty on their consignments.

“Such improved sales are good for us but we are concerned about the possible side effects in the long term. Such smuggling comes alongside adulteration of the original product that could see us lose customers after a while because nobody would want compromised quality,” Mrs Kariuki said.

Meanwhile local consumption of tea in January dropped 5 per cent compared to a similar period last yesterday owing to lower consumer purchasing power.

“The drop in local tea consumption was due to reduced buying by the consumers following their purchasing power erosion after the December 2009 festive season and less promotion activities by the stakeholders,” TBK said.