Market News

Trade spat slashes Iran tea volumes

Kenya is targeting Iran as a major tea buyer. FILE PHOTO | NMG
Kenya is targeting Iran as a major tea buyer. FILE PHOTO | NMG 

A dispute between Kenya and Iran over applicable standards could derail sale of tea in the Middle East market. The tussle revolves around the recommended minimum moisture content in the two countries.
Iran, one of the fastest growing new markets, has a lower limit of three per cent with an upper cap of eight per cent but the Kenyan tea normally falls below three.

Kenya uses ISO 3720, a global standard that does not stipulate a minimum moisture content.

The volume of tea exported to Iran in August declined 55 per cent to 197,000 kilogrammes from 437,905 in corresponding period last year.

“We met the ministry of Horticulture in Tehran last month to address the issue of standards where Iranian authorities insist on a minimum of three per cent for the tea imports. We agreed to invite them to Kenya to see how we handle our teas,” said Agriculture and Food Authority director-general Alfred Busolo.

Last month, Iranian officials seized two containers of tea with moisture content outside the required limits. The shipment was released last month after a delegation from Kenya’s Tea Directorate met Iranian government officials.

Mr Busolo says officials from Iran standards body, ministry of Agriculture and tea organisation have agreed to visit Kenya early next year to assess the tea.

The two countries have in the meanwhile agreed, the Iranian standards body and the tea buyers will be conducting tests on the tea that is disputed to determine its quality.

Kenya is targeting Iran as one of the major buyers and has been promoting sales in Tehran. According to AFA, Iran has a larger population of more than 80 million people with a per capita consumption of 1.4 kilogrammes against Kenya’s half a kilo, creating a huge potential market for the country’s produce.

Iran normally gets the bulk of its tea from India and Sri-Lanka with Kenya supplying about 20 million kilogrammes of the 120 million Iran imports annually.

The directorate has been banking on emerging markets and an increase in local consumption to improve the sale of the beverage and boost revenues for farmers.

Among the emerging markets that recorded significantly higher tea imports from Kenya in August are Indonesia, Japan, Ukraine, Belgium, Sri-Lanka, China and Hong Kong.