How China Outsmarted Kenya to Make Ksh 315B While Exporting Less Tea
A report by the Kenya Export Promotion and Branding Agency has highlighted how China made more earnings from tea exports in comparison to Kenya despite selling less tea to the international market.
In its January 2024 newsletter, the export agency noted that China made Ksh315 billion (USD 1.156 billion) from exporting 366 million kilograms of tea in 2019.
Kenya, on the other hand, earned Ksh180 billion (USD 2.019 billion) from exporting 496 million kilograms of tea.
The export agency explained that the huge difference in earnings was attributed to China’s move to add value to their exports, which were sold at a higher price.
Conversely, Kenya was exporting their tea in bulk with foreign companies being recipients of Kenya’s main export earner.
Interestingly, the recipients of Kenyan tea often process it further and sell it at higher prices, earning billions in the process.
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“The main reason for lower earnings from tea exports by Kenya is less export value attributed to selling in bulk as opposed to value-added form. Out of the total export volume, only 1 percent is in value-added form (packaging of Crush Tear Curl (CTC) tea into smaller packages of less than 3 Kilograms) while the rest is in bulk form.
“Tea exported in bulk form is used for blending with other teas and is packed for distribution in the export market without recognition of the source thus identity loss for Kenyan tea,” read the report in part.
Notably, the government is pushing for the export of more value-added tea to benefit from the foreign market.
For instance, in October 2022, President William Ruto flagged off Kenya’s first value-added tea exports to Ghana in an initiative he noted would be more beneficial to farmers.
Kenya’s main tea markets include; Pakistan, Egypt, the United Kingdom, and the United Arab Emirates (UAE).
Sudan, Afghanistan, Russia, and Yemen are also leading destinations.
How China Outsmarted Kenya to Make Ksh 315B While Exporting Less Tea