Tea transporters raise the red flag over theft

Workers offload tea leaves from a truck. Transporters of processed tea in Kenya have raised the red flag over theft along the Voi- Mombasa route. FILE PHOTO | NATION 

In Summary

• The truckers contracted by the Kenya Tea Development Agency (KTDA) have reported more than seven cases of theft in the past three months, creating suspicions of a powerful syndicate being behind the robberies.
• Each truck carries tea estimated to be worth Ksh10.2 million ($100,000), with a capacity of 26,000 kilogrammes.
• The theft also reduces total volumes of tea exported from Kenya, denying the country much needed forex earnings.

By GEORGE KAMAU
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Transporters of processed tea in Kenya have raised the red flag over theft along the Voi- Mombasa route, which has left them facing millions in losses.

The truckers contracted by the Kenya Tea Development Agency (KTDA) have reported more than seven cases of theft in the past three months, creating suspicions of a powerful syndicate being behind the robberies.

Each truck carries tea estimated to be worth Ksh10.2 million ($100,000), with a capacity of 26,000 kilogrammes.

“The theft has caused some of our contracts to be suspended, which means we have trucks lying idle, yet our outlook was based on those returns,” said one of the transporters.

No cases reported

However, the East African Tea Trade Association (EATTA) said no cases had been reported regarding tea stolen along the highways, but added that this had been a challenge years back.

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“If there is such an incident, KTDA should have reported it to us and I don’t see why they would keep quiet over it,” said Edward Mudibo, the managing director of the EATTA.

Sources within the police confirmed at least two cases reported in Mombasa, yet KTDA had not reported any incident to EATTA, which would ensure the stolen tea is kept off the auction market.

Other losses

The theft also reduces total volumes of tea exported from Kenya, denying the country much needed forex earnings.

Tea, which has for years been the main forex earner for Kenya, has been dethroned by diaspora remittances.

The tea that is transported is usually insured against theft, which shields factories from losses. If the insurer is not satisfied with the claims of theft, the loss is incurred by the transporter.

Payment of insurance premiums against theft increases the cost associated with tea production, further eroding the value attraction of taking up tea farming.

Tea farming in Kenya is already weighed down by high production costs, which are estimated at 54 per cent.

Labour cost, which is the largest contributing factor, is set to rise even higher following a court award of 30 per cent salary increase for tea pickers in 2016, which was to take effect late last year.

The high input costs make it vital for the final product to be sold at an attractive price to shield farmers from actual losses.