21-05-2025
'Tea for two' as Kenya seeks to boost exports to China – DW – 05/21/2025
Kenya aims to expand its tea exports to the Chinese market. In return, China will export tea packaging material to Kenya tax-free, before setting up packaging firms for the export market.
From its origins in China, tea has spread across trade routes over centuries, becoming a daily ritual for half of the world's population.
Recently, Kenya's President William Ruto met with one of China's top three tea producers, Fuzhou Benny Tea Industries, to explore opportunities for increasing Kenyan orthodox and specialty teas in China. Additionally, Kenya aims to strengthen its bilateral trade relationships with China by expanding its exports of important commodities to the Chinese market, such as coffee, avocados, and macadamias, according to a statement published on a Kenyan government website.
The high-level meeting brought together key stakeholders from Kenya's tea sector, including representatives from Kenya's Ministry of Agriculture, the KenyaTea Development Agency, and the Kenya Tea Board. "We will soon be allowing tea factories, to sell their teas directly to the international markets without intermediaries," Mutahi Kagwe, Kenya's Minister of Agriculture, told local reporters after the meeting.
The East African country is the world's biggest exporter of black tea.
In 2024, Kenya's tea industry accounted for nearly 158 billion Ksh ($1.22 billion, €1.065 billion) in annual revenues and supported over 750,000 farmers, according to the country's tea trade regulating body, Kenya Tea Board (KTB).
"Benny Tea Industries will be making $100 million worth of investments in Kenya," Willy Mutai, CEO of the Kenya Tea Board, told DW. "According to Mutai, the agreement would allow Chinese firms, such as Benny Tea, to export tea packaging material from China to Kenya tax-free.
However, for Kenyan tea farmer Samuel Kariuki, such an agreement could disrupt the local industry. "There could be an interruption when it comes to our supply chains, Kariuki, who is a manager at Sensory Garden Kenya, told DW.
"Tax-free packaging materials from China might sort of undercut the local packaging suppliers."
Search for more tea markets
Challenges such as fluctuating prices, competition from other tea-producing nations, and the need for value addition have forced Kenya to seek strategic partnerships in its tea trade. "Internationally, we face a lot of stringent certification requirements which are very costly and complex for us as farmers," Kariuki said.
"Meeting standards like the Rainforest Alliance and the likes of Fair Trade requires some amount of investment that we as farmers are possibly not able to have. Either way, even if we had that kind of investment, the investment is not guaranteed that, you know, there's going to be a return," Kariuki added.
Moreover, Trump's tariffshave sent shockwaves through global markets.
Kenya hopes that this new partnership with China will improve the production of high-quality Kenyan tea, diversify Kenya's tea exports, and align the country's tea industry with international market demands.
Is Africa ready for duty-free access to China?
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In addition, it would facilitate setting up modern factories in Kenya for technological transfer and bringing equipment to Kenya that can be used to produce teas that match the quality standards of the Chinese market.
Kenya hopes to establish standard user packaging facilities, enabling tea farmers to add value at the source. Mutai explained that Kenya is changing its policies to accommodate international buyers, allowing them to buy raw material or branded teas directly from factories in Kenya.
The Trump tariffs' effect
Trump's tariffs on China has forced the world's second-largest economy to seek and solidify its trade partnerships with countries like Kenya. Although Trump gave the world a 90-day relief, Kenya is grappling with the 10% universal tariff that the US president left intact.
We are currently doing 10% tariffs on the US," Mutai noted, emphasizing that the US trade barriers offer a significant opportunity for Chinese investors in tea. "They can come and pack here in Kenya."
AGOA and AfCFTA trade deals allow Kenya to export products, such as flowers, tariff free Image: epa Jon Hrusa/dpa/picture-alliance
Kenya's tea industry stands to benefit significantly from two major trade frameworks. The African Continental Free Trade Area (AFCFTA) and the African Growth and Opportunity Act (AGOA).
Kenya's two crucial trade deals
Under the AfCFTA, Kenya gains preferential access to a vast African market by eliminating tariffs and reducing trade barriers among member states. This agreement facilitates smoother intra-African trade, allowing Kenyan tea to reach new and growing markets across the continent more competitively.
It also encourages regional value chains, enabling Kenya to process and package tea locally before exporting, thereby increasing earnings and creating jobs. The agreement has already shown promise, with Kenya exporting tea to Ghana under AfCFTA protocols.
What is the AGOA US-Africa trade program?
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On the other hand, AGOA provides Kenya with duty-free access to the United States for a wide range of products, including tea. The deal gives Kenyan tea a pricing advantage in the US market and opens opportunities for value-added exports, such as branded and specialty teas. AGOA also incentivizes investment in quality improvement and packaging, helping Kenya move up the value chain and appeal to premium consumers.
Edited by: Chrispin Mwakideu
