Kenya has protested against a price cap that the Iranian government has imposed on tea exports to the country, putting the Sh4 billion market at the centre of a diplomatic tiff with Tehran.
Iran has instructed Kenya to set the maximum price per kilo of tea that it sells to the Asian country at $3 (about Sh300), with anything above the amount attracting a punitive tax. The move has seen Kenya’s
Ministry of Foreign Affairs write to the envoy in Tehran, asking him to seek clarification and lobby for easing of the new requirement.
“Kenya is seeking clarification as well as relaxation of the new rule that has been put in place by the Iranian government,” said the Director General of Agriculture and Food Authority, Anthony Muriithi, in an interview.
Kenya’s tea gets to Iran at about Sh400 per kilo, making it pricier than other teas sold in the country, mainly from India and Sri-Lanka.
The quality of Kenyan tea is however superior compared to the others, which makes it highly sought after by the Iranians.
Mr Muriithi said market factors make it difficult to sell at Sh300 per kilo in Iran.
“Some of the factors that might make it difficult to achieve the Sh300 per kilo include the high quality of Kenyan tea, cost of production and the shipping costs,” he said.
The Ministry of Foreign Affairs did not respond to our requests for comments on the matter.
Nairobi has been courting Iran to become one of the major consumers of Kenya’s tea, and has held sales exhibitions in Tehran aimed at wooing buyers.
Iran has a large population of more than 80 million people with a per capita tea consumption of 1.4 kilogrammes against half a kilo for Kenyans.
The country imports more than 100 million kilogrammes of tea, with Kenya supplying about 20 million kilos annually.
Pakistan is the biggest consumer of Kenyan tea, buying more than 40 percent of the total beverage produced in Kenya, earning the country about Sh50 billion a year.
Egypt, the United Kingdom, Sudan and the United Arab Emirates are the other major sources of Kenya’s tea dollars.
Export volumes to these countries have however been declining over the years hampered by trade barriers from different States.