Kenya 23 October 2025 - Kenya’s tea industry, long a backbone of rural livelihoods and a key foreign‐exchange earner, has hit a sobering milestone: export earnings fell for the first time in seven years, weighed down by a sharp drop in orders from Pakistan and a stronger shilling that eroded dollar-based returns.
For the year ended June 2025, earnings from Kenyan tea exports plunged 13.4 % to KSh 176.76 billion, down from a record KSh 204.14 billion a year earlier. Pakistan, which buys about 40% of Kenya’s tea, slashed imports by nearly 12.96%. Kenya’s earnings from Pakistan fell to KSh 74.01 billion from KSh 85.03 billion.
The decline has already translated into smaller payouts for smallholder farmers. In the catchment of the Kenya Tea Development Agency (KTDA), bonus payments to farmers fell by between KSh 0.80 and KSh 19.10 per kilogram of green leaf, compared to the previous year.
Why Did the Slide Happen?
Several economic and geopolitical factors have converged to create the steep decline in Kenya’s tea earnings this year. The most significant has been reduced demand in key markets, particularly Pakistan, which typically buys close to 40 percent of Kenya’s total tea exports.
The Kenya Tea Development Agency (KTDA) attributed the drop to geopolitical instability and shifting global trade patterns, noting that weaker demand from other traditional buyers such as Russia, Sudan, and Iran has further compounded the slowdown.
At the same time, a stronger Kenyan shilling has eaten into export revenues. The average exchange rate strengthened from about KSh 144 to KSh 129 per U.S. dollar compared to the previous year, effectively cutting roughly KSh 15 off every dollar earned by exporters.
Adding to the strain, the price per kilogram of tea at the Mombasa auction has fallen sharply, from KSh 385 in 2023/24 to KSh 322 in 2024/25 (around USD 2.27 per kg) due to oversupply and changing buyer preferences.
Together, these factors have left producers squeezed between lower prices and reduced earnings, dimming what was once Kenya’s most reliable source of foreign exchange.
The Human Cost
For millions of smallholder farmers and their families, the drop in bonus payments means leaner seasons ahead. In regions such as the Rift Valley and western Kenya, some payments fell by more than KSh 100 per kg of made tea. Many farmers say they face harder choices between school fees, food, and farm inputs.
History, Dependence, and Diversification
Tea has long been one of Kenya’s most reliable cash crops, deeply interwoven into rural income, export earnings, and labour markets. In 2023, export revenues reached a record KSh 180.57 billion, underpinned by high volumes and favourable exchange rate conditions.
Pakistan has been Kenya’s largest single market for tea for decades. In 2024 alone Kenya shipped over 206 million kg to Pakistan, accounting for about 34.7 % of total export volume. This deep dependence placed Kenya in a vulnerable position once Pakistan cut back orders. Efforts to diversify markets have been underway: Kenya has expanded to 96 tea export destinations in 2024 (up from 92 in 2023) and is targeting new buyers such as China.
What This Means for the Future
The earnings drop signals major policy questions:
1. How resilient is Kenya’s tea sector when one buyer accounts for nearly half its
trade?
2. Can producers shift quickly into higher‐value teas, niche markets or blended
products to capture stronger prices?
3. What safety nets are in place for farmers when global market conditions turn?
As the tea industry braces for volatility, the message is clear: dependence on one market and static product lines increase risk, even for a crop so deeply rooted in Kenya’s economy.
