KTDA Chairman Says Kenya's Export Levy Is Cutting Tea Demand, Contradicting Tea Board
The chairman of the Kenya Tea Development Agency said the country's 0.8% tea export levy has raised costs, pushed some buyers to suspend purchases and left tea unsold in warehouses. The Tea Board of Kenya said three weeks earlier that the levy's price effect was negligible.
Kenya's largest tea marketer said on July 22 that the country's 0.8% export levy is cutting demand for Kenyan tea, contradicting the Tea Board of Kenya's assessment three weeks earlier.
Enos Njeru, chairman of the Kenya Tea Development Agency, said the levy "has increased the cost of Kenyan tea, forcing some buyers to scale down or suspend their purchases." He said it "is eroding farmers' earnings by lowering the returns and bonuses they receive."
KTDA markets tea for about 600,000 smallholder farmers and handles roughly 60% of all tea traded at the Mombasa auction. Njeru's statement puts Kenya's dominant tea marketing channel at odds with the Tea Board: two of the country's own tea institutions now hold opposing positions on whether a policy in force since May 1 is damaging the market.
Njeru said the added cost is discouraging some buyers, with others cutting back or halting purchases outright, and that the result has been a buildup of unsold tea in warehouses. He said the government should reconsider and remove the levy, which he said would restore buyer confidence, improve exports and raise returns for smallholders.
The levy was created by Kenya's Tea Levy Regulations, 2026, gazetted April 1 under Legal Notice No. 56 and effective May 1. It charges tea exports 0.8% of the auction value, or the customs value for direct sales, alongside a 100% levy on imported bulk tea. It applies only to Kenyan tea. Competing East African producers selling on the same auction floor, among them Rwanda, Uganda and Burundi, are not subject to it.
Political criticism preceded the KTDA statement. On July 8, Erick Mutai, a county governor in Kenya's tea-growing region west of the Rift Valley, said the charge should be withdrawn. "The levy was imposed at the tea auction in the name of funding research. We ask, what research is this when our farmers are already suffering," he said. He said farmers in his region earn bonuses as low as Sh13 a kilogram, against markedly higher bonus payments east of the Rift.
This publication reported July 2 that the Tea Board of Kenya had reached the opposite conclusion. Board chief executive Willy Mutai said the levy's effect on price was negligible, and put cumulative export earnings at Sh55 billion ($424.02 million) across the first 24 auction sales of 2026, on 186.2 million kilograms (about 410 million pounds) offered at an average $2.28 a kilogram, about Sh295.
The board cited absorption as evidence that buying was holding up. KTDA-managed factories sold 74% of the tea they offered at Sale 24, up from 60% at the same sale a year earlier, it said. Rwanda's tea averaged $2.98 a kilogram, about Sh386, over the same stretch, on volumes that brought in about Sh5.1 billion ($39.32 million).
Njeru's remarks were reported separately on July 22 by Citizen Digital, SACCO Review, Ebru and other Kenyan outlets.
Sources: SACCO Review, KTDA Chairman faults tea export levy as sales decline; Ebru, Tea Farmers Face Lower Bonuses Amid Declining Global Demand; Food Business Africa, Kenya tea farmers earn US$424M from exports; Business Daily Africa, State eyes Sh1.4 billion from new tea export, import levy; KTDA, About Us.