By Benadeta Mwaura - Reporter
Kenya, June 09, 2026 - The volume of unsold tea at the Mombasa Tea Auction has climbed to its highest level this year, highlighting growing concerns within Kenya's tea sector over the impact of new taxation measures and weakening demand in key export markets.
Latest auction data shows that a significant quantity of tea offered for sale failed to attract buyers, with industry players increasingly linking the trend to the government's introduction of the 1.5% export and investment promotion levy, which exporters argue has raised the cost of Kenyan tea in an already competitive global market.
The development comes at a time when Kenya, the world's leading exporter of black tea, is grappling with shifting global demand patterns, currency pressures in some importing countries and heightened competition from producers such as India, Sri Lanka and Uganda.
According to data from the East African Tea Trade Association (EATTA), the volume of tea remaining unsold at the Mombasa auction has steadily increased in recent weeks, culminating in the highest unsold volumes recorded since the beginning of the year.
Industry stakeholders warn that the trend could eventually affect earnings for farmers and tea factories if buyers continue reducing purchases or pushing for lower prices.
The concerns have largely centered on the export levy introduced by the government as part of efforts to raise revenue and support export promotion initiatives.
Tea exporters argue that while the levy may appear modest, it comes at a time when international buyers are highly sensitive to price changes.
One trader quoted by Business Daily warned that the additional charge is making Kenyan tea less competitive in traditional markets.
"The levy is increasing the cost of doing business and ultimately affecting the competitiveness of Kenyan tea in export markets."
Industry players say buyers are increasingly comparing Kenyan tea prices with those from rival producing countries, forcing some to either reduce purchases or negotiate lower prices.
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The auction slowdown comes despite Kenya maintaining strong tea production levels. The country continues to earn more than Sh180 billion annually from tea exports, making the crop one of the country's most important foreign exchange earners alongside horticulture and tourism.
However, stakeholders fear that sustained growth in unsold volumes could put downward pressure on prices, affecting returns to farmers.
The tea industry supports millions of livelihoods directly and indirectly through farming, processing, transport and export activities.
The challenges facing the sector reflect broader concerns emerging across Kenya's export industries, where producers are increasingly warning about rising operating costs, taxation and global economic uncertainty.
The issue has also reignited debate over whether export-oriented sectors should be subjected to additional levies at a time when the government is seeking to increase foreign exchange earnings and promote value-added exports.
Tea factories and exporters have been urging policymakers to review the levy, arguing that maintaining competitiveness is critical for sustaining market share in key destinations such as Pakistan, Egypt, the United Kingdom, Sudan and the United Arab Emirates.
The rising volumes of unsold tea at the Mombasa auction come as the sector enters a crucial period for export sales, with stakeholders closely monitoring whether buyer demand rebounds in the coming weeks.
The concern is straightforward for farmers, amounting from prolonged weakness at the auction could eventually translate into lower earnings, affecting one of Kenya's most important agricultural value chains.
Industry leaders are now calling for consultations between government and tea stakeholders to address concerns over taxation and market competitiveness before the situation begins to significantly affect export revenues and farmer incomes.