This archive report was first published on 25 May 2020.
On May 25, 2020, the Kenya Tea Development Agency (KTDA) expressed concerns over new regulations proposed by the government, warning that they could spell the end of the tea sector.
The regulations, which aim to streamline the tea auction process, have been met with resistance from KTDA, which claims they will lead to an oversupply of tea in the market and subsequently lower prices.
KTDA Chairman Peter Kanyari pointed out that the drafters of the new regulations failed to consider the needs of buyers who demand specific teas at the factory level. He warned that these buyers will lose their market and move elsewhere if the regulations are implemented.
"We view the new regulations as a stumbling block to the sector," Kanyari said. "Bringing all tea to the auction will lead to an oversupply of the commodity in the market, and as the law of supply and demand dictates, prices will fall, thus the farmer will earn poor pay."
KTDA also predicted low bonuses for farmers this year, citing a 2.6% reduction in prices at the Mombasa tea auction. The agency attributed this decline to a 29% increase in tea production, which has risen to 1.2 billion kilograms from 139 million kilograms last year.
