Tea auction links pricing woes to delayed reforms

The Mombasa tea auction has responded to Agriculture Cabinet Secretary Peter Munya’s claims that the facility and Kenya Tea Development Agency (KTDA) were engaged in price fixing. FILE PHOTO | NMG 

By GERALD ANDAE
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Summary

• The Mombasa tea auction has responded to Agriculture Cabinet Secretary Peter Munya’s claims that the facility and Kenya Tea Development Agency (KTDA) were engaged in price fixing.
• East Africa Tea Traders Association (Eatta), which manages the auction, has instead accused the ministry of not implementing reforms the sector proposed to address low prices.
• Eatta managing director Edward Mudibo said the proposals by stakeholders would form the basis of addressing the pricing woes.

The Mombasa tea auction has responded to Agriculture Cabinet Secretary Peter Munya’s claims that the facility and Kenya Tea Development Agency (KTDA) were engaged in price fixing.

East Africa Tea Traders Association (Eatta), which manages the auction, has instead accused the ministry of not implementing reforms the sector proposed to address low prices.

Eatta managing director Edward Mudibo said the proposals by stakeholders would form the basis of addressing the pricing woes.

He said Eatta has over the years asked the government to scrap value added tax on tea to encourage local consumption, create an autonomous tea board and address high cost of inputs to give farmers better returns.

“The above interventions if implemented will make the tea sector flourish. Unauthenticated pronouncements and perceptions cannot be the panacea to the challenges facing the tea industry in Kenya,” said Mr Mudibo. 

Mr Munya recently accused KTDA and Eatta of using their dominance to manipulate the price of the commodity at the auction.

"We know what goes on at the auction. Huge volumes are withdrawn from the trading floor when KTDA and Eatta connive to negotiate a back-deal price for the same tea, we are going to stop this”, said Mr Munya.

However, Mr Mudibo said Eatta is an auction organiser and does not engage in tea tradin, ruling out any chancesoff price fixing.