NAIROBI Kenya, Feb 10 – Agriculture Cabinet Secretary Mithika Linturi has today flagged off the first-ever consignment of Kenyan value-added tea worth ShUSD29,667.6(Sh3.7 million) to Australia.
The 2.68 metric tons of tea have been shipped to Australia under the Kenyan Brand “Akina”.
“I am delighted to join you today to flag off the first-ever consignment of Kenyan value-added teas to Australia. The tea consignment, which is 2.68 metric tons valued at USD29,667.6 is being shipped to Australia under the Kenyan Brand “Akina”,” he said.
The tea is expected to fetch an average price of USD11(Sh1,375.77) per kilo of made tea in Australia though, similar teas being sold in bulk at the Mombasa tea auction are fetching on average USD 2.5(Sh 312.68) per kilo of made tea.
Linturi said that opening the Australian market to Kenya value-added teas with a Kenyan brand name is an important milestone for the Kenyan tea business.
He added that this will protect the Kenyan tea sector from over-dependence on a small number of traditional markets that have a preference for bulk teas and are easily unstable by economic and political shocks.
“Adding value to Kenyan teas before export is a viable route of growing the country’s manufactured exports, transforming the tea sub-sector in Kenya, and ensuring food security,” he said.
“The initiative by Empire is a bold step towards the realization of His Excellency the President’s directive to increase the volumes of value-added Kenyan tea exports from the current 1 to 50 per cent by 2027.”
The CS stated that whereas Kenya is the world’s leading exporter of tea accounting for 28 per cent of the Global tea exports, Kenya’s tea export earnings are relatively lower compared to the other key tea-producing countries.
He added that the Ministry intends to achieve the goal of increasing agricultural GDP from Sh2.9 trillion to Sh3.9 trillion through the Agriculture Sector Transformation and Growth Strategy (ASTGS) by promoting product diversification and value addition along the agricultural value chains, including the tea value chain.
According to Linturi, the high cost of packaging materials has attracted a Common External Tariff (CET) of 35 per cent on import and 16 per cent VAT, though the quality of packaging materials available locally may not meet the standards required in the export markets.
He adds that the ministry will remove taxation on the packaging material to reduce costs and enable a competitive market for the exporters.
“By removing taxation on packaging materials, we will be able to reduce packaging costs by about 30 per cent, enabling our exporters to be more competitive in the international market,” he said.
Linturi said the government will continue to engage in bilateral engagements at the governmental level and organize for trade engagements at the industry level in order to secure favorable trade conditions and ensure that Kenya’s value-added teas successfully compete in the global markets.
