Economy

Indians seek cap on cheap Kenyan tea imports amid glut

Tea-nandi

Workers pluck tea in Nandi Hills, Nandi County. FILE PHOTO | NMG

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Summary

  • Indian tea producers and exporters want their government to limit shipments of low priced Kenyan tea into the Asian country to stem glut that has hit farmers.
  • India is among the world’s largest producer of black tea alongside China.
  • But compared to Kenya, India’s tea export growth in global markets has been slow trailing Kenya.

Indian tea producers and exporters want their government to limit shipments of low priced Kenyan tea into the Asian country to stem glut that has hit farmers.

The Kolkata based Indian Tea Association (ITA) whose members represent over 60 percent of India's total tea production Monday urged the Indian Prime Minister Narendra Modi's administration to introduce a minimal import value for teas coming from Kenya.

India is among the world’s largest producer of black tea alongside China. But compared to Kenya, India’s tea export growth in global markets has been slow trailing Kenya.

Kenya has especially been giving a tough competition to India’s black tea exporters by offloading the commodity at a much cheaper price since its production has gone up significantly.

The association said Kenyan tea imported into India was selling at $1.7 (Sh187) per kilo compared with India’s $2.5 (Sh275) for the same quantity. It claimed while the imported teas from Kenya are meant for re-exports, a significant portion are being mixed with Indian teas and circulated in the domestic market at cheaper rates, undercutting Indian producers.

“We have to find out the real reason behind the import of such low-priced and substandard tea. It is a pity that a giant and renowned tea producer like India is buying the morning cuppa from countries like Kenya (6.9 million kilos in 2020),” ITA secretary Sujit Patra, was quoted saying in local Indian press.

The Business Daily could not immediately reach Kenyan Agriculture ministry officials for comment on the clamour for restrictions.

The move to put quotas on Kenyan tea, if effected, would deal a blow to the Kenyan tea farmers at a time the President Uhuru Kenyatta administration has been courting countries like India to grow and diversify Kenya’s export markets for tea amid production glut.

According to the Kenyan Tea Directorate, Kenya exported 2.8 million kilos of the green leaf between January and June this year to India up from 1.5 million kilos in the same period last year accounting for an 87 percent rise.