Tea industry players have warned of possible loss of traditional market as the State moves to outlaw the direct sale of the commodity overseas.
The East African Tea Trade Association (EATTA), which runs direct tea sale in Mombasa said the industry may experience ‘minimal disruption’ on the supply chain after the changes.
“All tea will be sold through the auction and we expect that importers will continue getting their orders as usual. But exporters who have long term contracts with international buyers might have to review those contracts and we don’t know how this is going to affect the market,” said managing director Edward Mudibo Monday in a phone interview.
“We are not certain for sure what is likely to play out there because they don’t only rely on tea from Kenya alone where the direct sale rule will apply but we wait to see.”
Last week, Agriculture Cabinet Secretary Peter Munya announced a raft of measures in reforms in the sector, which will see direct sales at the Mombasa auction managed by the association outlawed.
The directive has raised fears that once the rule is imposed at the tea auction, orders to importers who have been relying on direct sales might be disrupted. The Mombasa auction, the largest black tea market in the world, sells tea from Kenya, Uganda, Rwanda, Burundi, Tanzania, Democratic Republic of Congo, Malawi, Madagascar, Zambia and Zimbabwe.
Mr Mudibo said the EATTA would involve members from all the countries that sell their tea at the auction, adding that they were collecting views from stakeholders on the measures.