The government is working to improve earnings from tea exports through value additions, Agriculture and Livestock Development Cabinet Secretary Mithika Linturi has said.
Speaking in Karachi, Pakistan during the Pakistan Tea Association annual gala event, CS Linturi said this will increase the farmers’ and exporters’ earnings.
“Kenya is rated among the highest producers of quality tea worldwide with 77 market destinations worldwide, but our export earnings are not higher that other countries like Sri Lanka and China who export their tea with added value,” he said.
CS Linturi said one of the plans includes the establishment of a Special Economic Zones (SEZ) in Mombasa to replace the current Export Promotion Zones (EPZ).
“To circumvent these challenges, the Special Economic Zones may be a better scheme than the EPZ owing to numerous administrative, monetary and tax incentives,” added Linturi.
Establishment of Special Economic Zones (SEZs) is a key flagship project under the Kenya Vision 2030 economic pillar. Kenya plans to establish SEZs at Dongo Kundu in Mombasa.
Linturi further applauded Pakistan for being Kenya’s leading tea export market.
“Pakistan imports fifty-two percent of Kenyan tea making it our largest trade partner in the tea sector but we are still facing challenges in the trade due to lack of value addition to our tea,” stated the CS.
According to the latest statistics, Kenya exported tea to Pakistan valued at Sh54 billion in 2021.
The Cabinet Secretary however pledged to increase the trade volumes by improving the quality of Kenyan tea.
“The main reason for lower earnings from tea exports by Kenya compared to Sri Lanka and China, is selling in bulk as opposed to value added form. While Kenya tea exports in Value added form is about one percent that of Sri Lanka’s bulk is at about fifty-two percent,” noted the CS.
Speaking at the event, the Governor of Sindh region in Pakistan, Kamran Tessori lauded the quality of the Kenyan tea.
“Tea is an essential commodity in Pakistan and we largely prefer the Kenyan tea due to it’s quality. We should however improve our trade relations for the benefit of both importers and exporters,” said the Governor.
Linturi further promised to develop tea sub-sector, by providing fertilizer subsidy to cushion farmers against increasing cost of production and also introducing other incentives to further enhance the Kenyan tea competitiveness globally.
The tea industry is one of the leading foreign exchange earners for the Country accounting for twenty-six percent of the foreign exchange earnings and two percent of the National Gross Domestic Product.
The Cabinet Secretary was accompanied by the Kenyan Ambassador to Pakistan Nyambura Kamau, Kenya Tea Development Agency holdings (KTDA) Chairman David Ichoho, KTDA Chief Executive Officer Wilson Muthaura among others.