The cost of exporting tea through the Mombasa port has nearly tripled due to a shortage of merchant ships on sustained attacks by Yemen-based militants on vessels transiting through the Red Sea.
Exporters said they now have to wait for up to three weeks more to load cargo as the few operational vessels navigated longer routes around Africa instead of using the Red Sea and the Suez Canal with the extra costs passed to them.
Since last November, major shipping lines have stopped or temporarily halted Red Sea operations, affecting the supply chain in different sea port States.
The impact of this is that the cost of shipping a 40-foot container of tea to key destinations such as Russia has risen more than three times.
“It used to cost a tea exporter about Sh339,418.27($2,442) to ship a 40-foot container to Russia, Kenya's fifth biggest market for the beverage in October, but today it is about Sh904,764.78 ($6,513) to the nation and other neighbouring regions,” said Hassan Bule, a Mombasa based tea buyer.
He said that the cost has also been impacted by the ongoing Russia-Ukraine war that has seen vessels take longer routes following the closure of the Black Sea route.
Tea traders said the spiral effect of the interruptions has worsened a pile-up of stocks in warehouses as exporters waited for vessels.
“Ship turnaround time has remained a challenge as some shipping agents with contracts with tea exporters either delay picking up tea at Mombasa port or some have suspended their trips completely. This has seen the volumes of tea exported to Russia and other neighbouring countries such as Kazakhstan, Kyrgyzstan, Uzbekistan, and Azerbaijan significantly dwindling,” George Omuga, managing director of the East African Trade Association (EATTA) said.
“We have engaged Kenya Ports Authority to give priority to such ships as we plan to meet shipping agents to discuss how best we can reach an agreement about the skyrocketing freight costs which are also affecting the port of Dar es Salaam," Mr Omuga said.
The high freight costs and delayed shipments have blighted fortunes at the weekly auction in Mombasa where prices have risen on bigger demand for the quality crop on offer.
In this week’s trade at the Mombasa Tea Auction, a kilo of premium Kenyan tea sold at Sh 571.82 ($4.10) compared to Sh 422.58 ($3.03) at the beginning of the year.
