EDITORIAL: Resolve tea export row

Editorials

EDITORIAL: Resolve tea export row

Monday, February 25, 2019 20:02

By EDITORIAL

The Iranian government has asked Kenya to lower the price of tea to a maximum of three dollars (about Sh300) per kilogramme against Sh400 that has prevailed, including last year. Kenya has protested against this directive in which Tehran says it will tax heavily any extra amounts above the cap it is asking Nairobi to stick to.

This is a big issue because last year, Kenya exported Sh4 billion to that country, and the new demand would cut the earnings by Sh1 billion, using the 2018 figures. This development should worry Kenya because tea is one of the leading forex earners, and instead of losing some markets, the focus ordinarily is on growth, especially in a country whose per capita tea consumption of 1.4 kilogrammes is three times Kenya’s.

While Kenya says it has high quality tea, its cost of production is high, and shipping is also expensive. The country must find ways of making these points key issues to the importer, who has other alternatives, considering that Kenya supplied 20 percent of its tea imports last year. While trade tiffs are not new in the fast-changing world, we urge Kenyan diplomats to go past protests and initiate negotiations to resolve the dispute with Iran.

This is an urgent matter because it affects many small-holder farmers and trade disputes may sometimes assume snail speed that inevitably ends up hurting the most economically vulnerable the most.