Kenya’s earnings from tea exports fell in the financial year ended June 2025, marking the first drop in seven years, largely weighed down by reduced orders from the country’s biggest buyer, Pakistan, and a firmer shilling that eroded the value of export receipts.
Analysis of official data shows total tea export earnings dropped by 13.41 percent to Sh176.76 billion in the financial year 2024-25, down from a record Sh204.14 billion the previous year.
The decline is the first since 2017-18, ending a steady growth streak for Kenya’s top agricultural foreign exchange earner.
The setback has rippled through the value chain, hitting smallholder farmers hardest.
Farmers in the Kenya Tea Development Agency (KTDA)’s catchment areas earned between Sh0.80 and Sh19.10 less per kilogramme of green leaf as the second payment, popularly known as a bonus, during the year to June 2025, compared with the previous year.
The KTDA has attributed reduced payout largely to the stronger shilling, which averaged Sh129 to the US dollar, compared with Sh144 the year before, translating into a loss of roughly Sh15 for every dollar earned.
“The drop in tea prices was mainly driven by huge tea stocks that had built up during the reserve price window, which was only removed in October 2024 [after the reserve price was dropped],” said KTDA management in an emailed response.
“Geopolitical challenges and instability in key markets such as Pakistan, Russia, Sudan, and Iran also affected demand, though the situation has now slightly stabilised.”
Pakistan, which accounts for about 40 percent of Kenya’s tea market, cut its imports by nearly 12.96 percent, data collated by the Kenya National Bureau of Statistics show, with earnings from the destination falling to Sh74.01 billion from Sh85.03 billion a year earlier.
This marked the first fall in value of exports to Pakistan since the financial year 2018-19, when Kenya’s earnings from the South Asian country dipped 24.98 percent to Sh49.52 billion.
KTDA data shows that average prices per kilogramme of processed tea dropped across all major growing zones.
Farmers in Kiambu earned Sh371, down Sh46, while Murang’a and Nyeri fetched Sh376 and Sh388, both falling by Sh42. In Kirinyaga, the price stood at Sh400, Sh38 lower, and Embu and Meru earned Sh404 and Sh381, down Sh34 and Sh46, respectively.
The steepest declines were recorded in the Rift Valley and western regions, where Kericho farmers earned Sh245 (down Sh101), Bomet Sh209 (down Sh85), Nyamira Sh266 (down Sh106), Kisii Sh246 (down Sh95), and Vihiga Sh208 (down Sh66).
The KTDA said in a statement that the reduction in farmers’ second payments for green leaf was mainly due to the drop in tea prices in shilling terms—from Sh385 per kilogramme of made tea in 2023-24 to Sh322 per kilogramme in 2024-25. That marked a fall of about Sh62 per kilogramme.
The agency’s management added that the quality of tea remains a key factor in price determination, insisting that farmers should avoid poor plucking standards associated with hawking.
“We urge our farmers to shun hawking standards and revert to two leaves and a bud,” the agency said.
“Regions like Kiambu, Kericho, Bomet, Kisii, Nyamira, Nandi, Vihiga, and Trans Nzoia have suffered in quality due to the influx of hawkers.”
The agency has also cited rising production costs as a continuing challenge.
“It now costs an average of Sh104 to produce a kilogramme of made tea,” it said. “We are asking factories to institute austerity measures, cut waste and optimise their production capacity to lower unit costs.”
This came in the period the government continued to subsidise prices of fertilizer in a bid to ease the elevated cost of inputs for farmers and increase earnings. Other interventions specific to the sector included the removal of the minimum reserve price at the Mombasa auction — which KTDA says helped clear previously accumulated stocks — and the opening of new export markets such as China.
KTDA has backed the removal of VAT on local tea sales to encourage domestic consumption, the elimination of taxes on tea packaging materials, and logistical improvements in roads and port services that support export trade to help improve earnings for farmers this financial year.
The correction in tea earnings from peaks in the 2023/24 financial year, which was partly helped by strong global prices and a relatively weaker shilling, highlights the vulnerability of Kenya’s tea trade to global and local shocks.
Players in the Kenyan tea industry are betting on a shift to specialty teas to improve earnings in the industry, hard-hit by plunging fortunes from dealing in traditional black tea. Kenya is the only country in the world that produces purple tea, but the country has yet to tap its full potential, even with a ready market.
