Rwandan tea continues to outperform regional competitors at the Mombasa Tea Auction, fetching the highest prices among East African producers as Kenyan tea exporters grapple with the impact of a newly introduced export levy and mounting logistical challenges.
Latest auction data show that Rwandan tea achieved an average price of US$2.81 per kilogramme, significantly outperforming Kenyan tea, which sold at an average of US$2.20 per kilogramme, while Ugandan tea fetched US$1.26 per kilogramme.
Industry analysts attribute Rwanda’s strong showing to consistent quality standards, efficient supply chains and growing demand from international buyers seeking premium teas despite ongoing uncertainties in global commodity markets.
The performance highlights Rwanda’s rising profile in the regional tea industry at a time when Kenya, traditionally Africa’s largest tea exporter, faces growing concerns over competitiveness following the introduction of an export levy in May.
The levy has particularly affected teas marketed through the Kenya Tea Development Agency (KTDA), which handles the majority of tea produced by smallholder farmers in Kenya’s West and East Rift regions.
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Although transit tea remains exempt from the charge, traders say the additional cost has made Kenyan tea less attractive in key export markets, prompting some buyers to shift towards cheaper alternatives from neighbouring countries.
The impact was evident at the latest Mombasa Tea Auction, where unsold tea volumes reached their highest level this year. According to auction data, only 9.19 million kilogrammes of the 12.52 million kilogrammes offered for sale during Sale 22 found buyers, leaving approximately 27 percent unsold.
The figure marks a continued deterioration in market performance, with unsold tea volumes rising steadily from 22 percent during Sale 20 and 23 percent during Sale 21.
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Market participants say the trend reflects a combination of higher export costs and disruptions to global shipping routes linked to ongoing tensions in the Middle East.
Tea Buyers Association Chairman Peter Kimanga warned that the export levy could ultimately hurt farmers by increasing costs throughout the tea value chain.
Since the levy took effect on May 1, exporters handling KTDA teas have faced additional charges estimated at around Ksh80,000 ($618) per container before tea can leave the country.
According to Kimanga, these costs are likely to be passed on to farmers through lower payments and reduced annual bonuses if the levy remains in place.
He also noted that Pakistan, one of Kenya’s largest tea export destinations, has raised concerns over the measure because it applies specifically to Kenyan tea, potentially putting the country at a disadvantage against competing suppliers.
“Buyers naturally compare prices and choose the most competitive option,” industry stakeholders say, warning that Kenya risks losing market share despite maintaining a reputation for producing some of the world’s highest-quality black tea.
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The requirement that levies be paid before export has added further pressure on exporters already contending with higher freight costs, insurance premiums and financing expenses.
Meanwhile, some regional competitors continue to avoid the Mombasa auction altogether. Tea-producing countries such as Tanzania, Malawi and Mozambique increasingly rely on direct sales and brokered arrangements with international buyers rather than participating in the auction system.
Analysts say this trend reflects changing dynamics within the regional tea trade and highlights the growing importance of pricing flexibility and supply-chain efficiency.
Despite criticism from industry stakeholders, the Kenyan government has defended the export levy as part of broader reforms aimed at improving earnings for tea farmers.
Agriculture Cabinet Secretary Mutahi Kagwe has said the measures are designed to double smallholder farmer incomes and increase green leaf prices to Ksh100 ($0.77) per kilogramme by 2027.
However, industry observers caution that achieving those objectives will depend on maintaining Kenya’s competitiveness in international markets.
As Rwanda continues to command premium prices and buyers increasingly scrutinize costs, the coming months are expected to test whether Kenya’s reform strategy can balance higher farmer returns with sustained export demand in an increasingly competitive regional tea market.
