Kenya’s Tea Industry Faces Major Revenue Losses
Kenya is experiencing a significant financial setback, with losses exceeding $80 million in tea export revenue this year due to an ongoing ban on exports to Sudan and Iran. This situation has been exacerbated by the government’s inability to resolve diplomatic tensions that have disrupted trade with these two key markets.
The joint Kenya-Iran committee, established to address trade barriers and facilitate the resumption of tea exports to Tehran, has failed to produce results. Its mandate has now expired, leaving the Mombasa Tea Auction to continue operating at reduced volumes. George Omuga, the managing director of the East Africa Tea Trade Association and a member of the Kenya-Iran joint committee, expressed concern over the impact on farmers. He noted that while progress is being made in resolving the dispute with Iran, the economic effects are already being felt by those involved in the industry.
“Although the talks are going well, they have surpassed the mid-October deadline. Our main concern is the reduced volume at the Mombasa Tea Auction, considering that Iran was a key market, with exports reaching $33 million in 2024,” Mr. Omuga said. He also highlighted the need for swift action regarding the Sudan market.
The Iranian Tea Export Ban
Iran imposed a ban on Kenyan tea imports following a scandal involving substandard tea leaves. This led to the formation of a joint committee in August 2025, aimed at improving quality and restoring trade relations. The decision to establish the committee was made during the 7th Session of the Kenya-Iran Joint Commission for Cooperation (JCC) in Nairobi.
A Kenyan firm, Cup of Joe Limited, was found to be importing low-quality tea, blending it, and exporting it as premium Kenyan tea. This unethical practice compromised the reputation of Kenya’s globally respected tea brand. As a result, the Tea Board of Kenya deregistered the company, which now faces prosecution.
Iran is one of the largest importers of tea, with annual imports exceeding 100 million kilogrammes. Kenya supplies about 20 million kilos annually, with 13 million kilos exported in 2024, valued at $33 million. This highlights the importance of the Iranian market to Kenya’s tea industry.
Concerns Over Sudan’s Import Ban
While discussions with Iran continue, tea dealers are worried about the delay in initiating talks to resolve the diplomatic tensions with Sudan. The country banned all imports from Kenya in response to diplomatic issues, including allegations that Kenya hosted leaders of the Rapid Support Forces (RSF) to launch a parallel government in Nairobi.
Sudan’s military government cited the need to preserve national sovereignty and protect its security as reasons for the ban. This has created additional challenges for Kenyan tea exporters, who are now dealing with contractual obligations and the difficulty of selling specific tea grades in other markets.
Peter Kimanga, director of the Kenya Tea Development Authority (KTDA), emphasized the unique nature of the Sudanese market. “Sudan primarily imports specific tea grades that are not easily absorbed by other markets. Apart from seeking other markets, the government should engage Sudanese authorities to safeguard the livelihoods of thousands of farmers and traders who depend on tea exports,” he said.
Impact on Farmers and the Economy
The tea export ban to Sudan has had a severe impact on small-scale farmers and traders. With the ban extended, many are struggling with the loss of contracts and potential bonuses. Mr. Kimanga warned that ignoring the Sudan market could have long-term consequences for the industry.
Despite these challenges, Kenya’s tea exports saw an overall increase in 2024, with revenues reaching $1.65 billion, representing an 18 percent rise from the previous year. However, the Mombasa Tea Auction only recorded a one percent increase in revenue compared to 2023, highlighting the broader impact of the export bans.
Diversification of Export Markets
In 2024, Kenya’s tea was exported to 96 destinations, up from 92 in 2023. Pakistan remained the leading export destination, importing 206.27 million kilos, which accounted for 34.7 percent of total exports. Other key markets included Egypt, the UK, UAE, Russia, India, and Saudi Arabia.
The situation underscores the need for Kenya to diversify its export markets and strengthen diplomatic ties to ensure the stability of its tea industry. While progress is being made in some areas, the delays in resolving disputes with Sudan and Iran continue to pose significant challenges for the sector.