KTDA CEO Wilson Muthaura, Agriculture CS Mutahi Kagwe and KTDA chairman Chege Kirundi. PHOTO/FILE.
Kenya is one of the world’s largest exporters of tea, but within the country, a growing controversy has arisen over the significant price disparities between tea grown in the East and West of the Rift Valley.
Tea farmers in the Eastern Rift, such as those from the Mt. Kenya region, have long enjoyed higher prices and bonuses at the Mombasa tea auction compared to their counterparts in the Western Rift, including Kericho and surrounding areas.
The divide has sparked frustration and accusations of mismanagement within the Kenya Tea Development Agency (KTDA), which is responsible for overseeing much of the country’s smallholder tea production. However, these claims often fail to recognise the underlying factors that contribute to the price differences.
Understanding why tea from the Eastern Rift fetches higher prices at the Mombasa auction requires a closer look at the complex interplay of market dynamics, regional tea quality, production practices, and broader structural issues affecting the tea industry.
The Mombasa tea auction, where a significant proportion of Kenya’s tea is traded, is fiercely competitive. Buyers at the auction are willing to pay a premium for tea that meets the highest quality standards. Tea from the Eastern Rift, especially the Mt. Kenya region, enjoys a reputation for superior quality, which is a direct result of its unique climate and geography.
The region’s cooler temperatures, high altitudes, and consistent rainfall provide ideal growing conditions, producing tea that is fragrant, robust, and bright in liquor.
This tea is in high demand globally, often sought after for blending due to its distinctive characteristics. In contrast, tea from the Western Rift, which includes regions like Kericho, Bomet, Kakamega, Bungoma and Kisii, tends to be grown at lower altitudes, where warmer temperatures can lead to a less vibrant flavour profile.
While tea from this region is still considered good quality, it does not consistently meet the high standards set by buyers in the same way that tea from the Eastern Rift does, and this difference in quality is reflected in the prices paid at auction.
Another contributing factor is the difference in production practices between the two regions. Tea quality in Kenya is largely influenced by the precision with which it is harvested.
In the Eastern Rift, farmers generally follow the ideal practice of plucking only the top two leaves and a bud; the tender, young leaves that are known to produce the best brew. This method ensures that the tea remains high in quality and helps justify its higher price at auction.
In contrast, farmers in the Western Rift are often more focused on producing larger volumes of tea, sometimes leading to less selective plucking. This can result in tea that is less consistent in quality, further widening the price gap between the two regions.
The focus on volume over quality, while beneficial in terms of total production, does not yield the premium tea that buyers at the Mombasa auction are willing to pay top prices for.
Apart from production practices, broader market dynamics also influence pricing at the Mombasa auction. The KTDA has pointed to the issue of carry-over stocks in the Western Rift, where surplus tea from previous seasons can lower the price at subsequent auctions.
When factories in the West are burdened with excess tea, they may be forced to sell it at reduced prices, which depresses the overall value of tea from the region. Conversely, tea from the East of Rift often sees a more consistent supply, attracting higher bids from buyers.
A tea plantation in Kenya. PHOTO/FILE
Market fluctuations also play a role in driving prices. Global demand for tea, particularly from key buyers in markets like the Middle East and Pakistan, can influence prices significantly.
The price of tea is further affected by the strength of the Kenyan Shilling, as a weaker currency can result in lower returns for farmers, especially those in the Western Rift, where KTDA payouts tend to be more volatile.
The cost of production varies between regions, with some factories in the East of Rift having made significant investments in infrastructure, including self-sufficient power sources. This has allowed these factories to lower their operational costs and offer higher prices to farmers, further boosting the region’s ability to produce high-quality tea consistently.
In contrast, many factories in the Western Rift, particularly in more remote areas, lack such infrastructure, leading to higher operational costs. These additional costs limit the amount that factories can pay farmers, making it difficult for the Western Rift to compete on the same level as the East in terms of prices at auction.
While climate, quality, and market forces play significant roles in the price disparity, structural inefficiencies within the Kenyan tea sector cannot be ignored. The KTDA has come under scrutiny for its management of the tea industry, with some farmers from the Western Rift accusing local brokers and private factory owners of engaging in practices that artificially depress prices.
Allegations have been made that these actors may collude to offer lower prices to farmers, thereby discouraging them from selling to the KTDA, which could ultimately harm the industry’s broader pricing structure.
The lack of transparency in how prices are set and how auction outcomes are managed has led to calls for reforms. Farmers, especially those in the Western Rift, feel disadvantaged by a system that appears to favour certain regions over others, even though they produce a significant share of the country’s tea.
The disparities in tea prices between the East and West Rift are unlikely to be resolved overnight. In the short term, the gap is likely to persist, as the underlying factors of climate, production practices, and market dynamics continue to shape auction prices.
However, the government’s recent calls for reforms, including efforts to improve the efficiency of tea processing and to enforce clearer payment timelines, may help address some of the systemic challenges.
Moreover, the introduction of greater transparency within the KTDA and better oversight of the tea auction system could go a long way in restoring confidence among farmers, particularly those in the Western Rift. Until then, both tea farmers and buyers will have to navigate the complex landscape of price disparity, balancing quality, production costs, and market volatility.
The hope is that, with the right interventions, Kenya’s tea sector can become more equitable and competitive, ensuring fair prices for all farmers regardless of their region. However, that goal is still a work in progress.
