Kenya’s tea industry faces Sh6.5 billion losses as Sudan ban persists

Kenya’s tea industry faces mounting financial losses exceeding Sh6.5 billion annually following Sudan’s continued ban on Kenyan tea imports.

The embargo, which has persisted since March, has left tea farmers, traders and exporters grappling with unfulfilled contracts and threatened livelihoods. Sudan, one of Kenya’s top-five tea export destinations, imports specific tea grades that are not easily absorbed by other buyers, making the ban particularly damaging to the industry.

Stakeholders have now urged the government to swiftly mend strained diplomatic ties to save the multi-billion-shilling sector.

Director at the Kenya Tea Development Authority (KTDA), Peter Kimanga, highlighted the unique challenges the Sudanese market poses.

“Sudan has a unique market since it primarily imports specific tea grades that are not easily absorbed by other buyers. With the ban being extended after the window to clear tea on the supply chain, Kenyan tea farmers reel as the Sudan ban threatens bonuses and livelihoods since tea traders and merchants still have valid contracts,” he said.

A Mombasa-based tea dealer also warned that traders with active commercial contracts are at risk of massive losses.

“Traders with active commercial contracts will incur losses projected at Sh6.5 to Sh7 billion annually if the standoff is not resolved,” Harry Kumbe told Business Daily.

He also criticised the government’s approach during recent market visits, noting that Agriculture Cabinet Secretary Mutahi Kagwe focused on the Iranian market during his visit to the Mombasa Tea Auction, while the ongoing Sudan tea ban was not addressed.

“When Agriculture Cabinet Secretary Mutahi Kagwe visited the Mombasa Tea Auction last week, we were shocked that he did not address the Sudan issue, but instead focused on the Iranian market. The Sudan market is easy to access with less payment bureaucracy considering sanctions in Iran,” he said.

The Sudanese government imposed the ban in March following Kenya’s hosting of the paramilitary Rapid Support Forces (RSF), who have been engaged in a two-year civil war against the army.

Sudan’s military-led administration stated that the ban aimed to preserve the country’s sovereignty and “protect its national security.” President William Ruto has faced criticism over his perceived close ties with the RSF.

In June, Sudan temporarily allowed Kenya to clear about 400 bags of tea already in transit at Port Sudan, but the broader trade freeze remains in effect. Tea exporters warn that this ongoing embargo will significantly affect cash flow, with ripple effects on producers and smallholder farmers who depend on tea for income.

Meanwhile, Kenya has made progress in resuming trade with Iran. CS Kagwe announced that Kenya and Iran had formed a joint committee to remove trade barriers and resume tea exports within 60 days.

“We have less than 30 days for the committee to unlock the Iran tea market since the crop remains Kenya’s leading export to the Middle Eastern nation, accounting for over 90 per cent of bilateral trade,” he said.

However, Kumbe and other stakeholders remain concerned that Sudan, a longstanding market, has been sidelined in government efforts. The industry warns that failing to address the Sudan embargo could result in losses comparable to or exceeding those anticipated from the Iran market negotiations.

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Kenya’s tea exports to Iran reached Sh4.2 billion ($33 million) in 2024, reflecting the potential of Middle Eastern markets to sustain the industry. But traders stress that regaining access to Sudan is crucial for long-term stability and to protect the livelihoods of thousands of smallholder farmers.