Tea exports are set to become more expensive in the global
market following the reintroduction of cess by Mombasa County in a new
blow to the regulator’s effort in addressing the costly nature of the
Kenyan produce abroad.
The county has sent a circular
to tea stakeholders informing them of a Sh32 levy on every package of
tea that transits through Mombasa.
The cess was first
introduced in 2014 but suspended in 2015 following a court case against
the county. However, the court recently ruled in favour of the county
thereby allowing it to collect cess on trucks carrying tea and other
goods destined for sale in Mombasa County.
“The
secretariat is following up with the county government as this is a
major disruption to the Mombasa Tea Auction Centre,” says East Africa
Tea Traders Association (Eatta) managing director Edward Mudibo.
“The board of Eatta has taken up the matter with the county
government and will put up a strong protest to stop the charging of the
cess,” he added.
The Tea Directorate has condemned the move saying it is not in the best interest of the Kenyan tea at the international market.
“An
additional cost on Kenya’s tea when we are trying to cut down on cost
production does not augur well for our customers. We are also trying to
cut the price of the commodity abroad,” said the directorate.
The
directorate has engaged Kenya National Productivity and Competitive
centre to review the cost of production as it seeks to cut the price of
Kenyan tea at the international market. The directorate wants to reduce
the cost by 10 per cent in the coming few years with a view to lowering
prices abroad.
The
tea regulator says it will engage the county governments to address
this trade barrier that is likely to affect tea sales abroad. Kenya
faces stiff competition from Sri Lanka and India in the global market.
Eatta runs the Mombasa tea auction centre, the largest in the world.
Besides
Kenya, other EATTA member countries include Uganda, Tanzania, Rwanda,
Burundi, DR Congo, Malawi, Madagascar, Mozambique and Ethiopia.
Among
the tea growing areas in Kenya are Kericho, Bomet, Nandi, Kiambu,
Thika, Maragua, Murang’a, Sotik, Kisii, Nyamira, Nyambene, Meru, Nyeri,
Kirinyaga, Embu, Kakamega, Nakuru and Trans-Nzoia.
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