Sh200m boost for farmers as Pakistan ends tea export levy

What you need to know:

Kenya’s Trade CS Betty Maina and Pakistan High Commissioner to Kenya Saqlain Syedah announced the removal of the levy that has been in place since 2007.
Pakistan had imposed it after Kenya slapped its rice with 75 percent duty in line with the requirement of the East African Community Protocol.

Kenya’s tea farmers will save Sh200 million a year after Nairobi and Pakistan ended a decade-long tariff war that had seen Pakistan levy an attestation fee of 0.5 percent on tea from Kenya.

Kenya’s Trade CS Betty Maina and Pakistan High Commissioner to Kenya Saqlain Syedah announced the removal of the levy that has been in place since 2007.

Pakistan had imposed it after Kenya slapped its rice with 75 percent duty in line with the requirement of the East African Community Protocol.

The Asian state remains the largest buyer of Kenyan tea, accounting for more than a third of all the commodity exported last year.

“I am glad to inform Kenyan [tea] traders that the attestation fee has officially been removed effective August 16, 2021. I have on record the confirmation of the removal of that gazette notice in Pakistan,” Ms Maina said on Tuesday.

Ms Syedah said the agreement was in line with Pakistan's policy on Africa, aimed at improving the ease of doing trade between her country and the continent.

East African Tea Traders Association (Eatta) managing director Edward Mudibo said the move to abolish the attestation fee will boost to the earnings of growers.

“It is a positive move that the government of Pakistan has agreed to abolish the levy, this comes as a major boost to the farmers,” said Mr Mudibo.

Tea stakeholders have for years lobbied for the removal of the levy, which made Kenya’s tea more expensive in Pakistan when compared with beverages from other countries.

Before tea is exported to Pakistan, the buyers were required to get clearance from the Embassy of Pakistan in Kenya after paying the levy.

Pakistan bought tea worth Sh38 billion from Kenya last year, cementing its position as the top buyer of Kenya’s beverage.

In the five months to May this year, Pakistan had already purchased tea worth Sh20 billion at the Mombasa Auction. The volume of tea exported to Pakistan increased by 20.7 million kilogrammes to 93.7 million kilos in the period, accounting for 35 percent of total exports.