Tea exports are set to become more expensive in the global market following the reintroduction of cess by Mombasa County in a new blow to the regulator’s effort in addressing the costly nature of the Kenyan produce abroad.
The county has sent a circular to tea stakeholders informing them of a Sh32 levy on every package of tea that transits through Mombasa.
The cess was first introduced in 2014 but suspended in 2015 following a court case against the county. However, the court recently ruled in favour of the county thereby allowing it to collect cess on trucks carrying tea and other goods destined for sale in Mombasa County.
“The secretariat is following up with the county government as this is a major disruption to the Mombasa Tea Auction Centre,” says East Africa Tea Traders Association (Eatta) managing director Edward Mudibo.
“The board of Eatta has taken up the matter with the county government and will put up a strong protest to stop the charging of the cess,” he added.
The Tea Directorate has condemned the move saying it is not in the best interest of the Kenyan tea at the international market.
“An additional cost on Kenya’s tea when we are trying to cut down on cost production does not augur well for our customers. We are also trying to cut the price of the commodity abroad,” said the directorate.
The directorate has engaged Kenya National Productivity and Competitive centre to review the cost of production as it seeks to cut the price of Kenyan tea at the international market. The directorate wants to reduce the cost by 10 per cent in the coming few years with a view to lowering prices abroad.
The tea regulator says it will engage the county governments to address this trade barrier that is likely to affect tea sales abroad. Kenya faces stiff competition from Sri Lanka and India in the global market.
Eatta runs the Mombasa tea auction centre, the largest in the world.
Besides Kenya, other EATTA member countries include Uganda, Tanzania, Rwanda, Burundi, DR Congo, Malawi, Madagascar, Mozambique and Ethiopia.
Among the tea growing areas in Kenya are Kericho, Bomet, Nandi, Kiambu, Thika, Maragua, Murang’a, Sotik, Kisii, Nyamira, Nyambene, Meru, Nyeri, Kirinyaga, Embu, Kakamega, Nakuru and Trans-Nzoia.