Workers plucking tea. FILE PHOTO | NMG
Summary
- The stalemate, which has so far affected 151 export containers carrying tea valued at $9.4 million (Sh940 million), is the latest in a chain of operational inefficiencies that are affecting business at the port.
- East African Tea Traders Association (Eatta) said major shipping lines, such as Maersk that tea traders use to move exports destined for Pakistan, have rejected the bookings citing inefficiencies in the loading export cargo.
- Pakistan is the top buyer of Kenyan tea. Eatta says the delays are the result of heavy congestion at the port that has seen import cargo fill up container stacking areas to capacity leaving no room for the stacking of export containers in readiness for loading on the vessels.
Tea traders risk losing millions of shillings in a logistics
crisis arising from the shipping lines’ rejection of their consignments
in the wake of a persistent slowdown in the loading of vessels at the
Mombasa port over the past two weeks.
The stalemate,
which has so far affected 151 export containers carrying tea valued at
$9.4 million (Sh940 million), is the latest in a chain of operational
inefficiencies that are affecting business at the port.
East
African Tea Traders Association (Eatta) said major shipping lines, such
as Maersk that tea traders use to move exports destined for Pakistan,
have rejected the bookings citing inefficiencies in the loading export
cargo.
Pakistan is the top buyer of Kenyan tea. Eatta
says the delays are the result of heavy congestion at the port that has
seen import cargo fill up container stacking areas to capacity leaving
no room for the stacking of export containers in readiness for loading
on the vessels.
“The major shipping lines have curtailed tea export bookings by
more than 50 per cent and this is coming at a time when the Mombasa Tea
Auction is selling very high volumes of tea,” said Edward Mudibo, the
Eatta managing director.
The Business Daily could
not reach the port’s managing director, Catherine Mturi-Wairi, as she
did not respond to phone calls nor reply text messages.
Eatta,
which manages the auction, warned that failure to ship the tea promptly
could lead to a major crisis as the tea buyers will run out of working
capital to purchase more of the commodity leading to a crash in prices
in the wake of low demand.
The price of tea at the
auction has already touched a three-year low in recent weeks having
dropped to Sh247 per kilo on Tuesday.
“These delays
might also lead to the real possibility of the auction being suspended
with serious ramifications on the farmers, investors and the Kenyan
economy,” he added.
Mr
Mudibo urged the authorities to address the matter with speed arguing
that the delays will discourage transport ships from docking at the Port
of Mombasa.
Logistics firms and millers have over the
years raised concerns over operational inefficiencies at KPA, which they
say costs them millions of shillings in losses.
For
instance, delays in discharging wheat at the port last year saw
importers slapped with demurrage charges of $15,000 (150,000) per day
for a single ship for nearly one month.
KPA blamed the interruptions on heavy rains.
The
monopoly of Grain Bulk Handlers at the facility has also raised
concerns among stakeholders who say it encourages laxity that comes with
high inefficiency costs.
Public Works principal
secretary Paul Maringa said last year it is not in the interest of
government to have a monopoly in place and that it would like to see
another player at the port.
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