$23M Tea Exports Stuck at Mombasa Port

Kenyan Tea Exports Face Significant Losses Amidst Middle East Conflict

Kenyan tea exporters are grappling with substantial financial setbacks as approximately $23 million worth of tea remains stranded at the Mombasa auction, now entering its third week, due to the escalating Israel-Iran conflict. This unprecedented situation is further compounded by the closure of the vital Port of Salalah in the Arabian Sea, a critical transit hub for tea destined for key markets including Pakistan, the United Kingdom, and various European nations.

The geopolitical tensions and ongoing conflicts in the Middle East have heightened concerns for Kenya’s tea industry, which experienced similar market losses last year due to disputes involving Iran and Sudan. Industry experts warn of continued financial repercussions if the current situation persists.

George Omuga, Managing Director of the East African Tea Trade Association (EATTA), highlighted the severity of the crisis. “Every week, the tea sector is losing an estimated 2 to 3 million kilograms of tea that was intended for export to the Middle East,” Omuga stated. He elaborated that the closure of the Strait of Hormuz has prompted numerous vessels to cancel their voyages to Mombasa. Others are being forced to undertake significantly longer routes to reach Kenya, resulting in substantial delays.

“We export approximately 20 to 25 percent of our teas to the Middle East, and we have effectively lost this market due to the ongoing conflict,” Omuga explained. “Around 8 to 10 million kilograms of tea, valued at over Ksh3 billion (approximately $23.12 million), have been held in warehouses and at the Port of Mombasa since the conflict began.”

The disruption has been exacerbated by the unexpected closure of the Port of Salalah. Following an attack on March 11th, which saw several drones strike its fuel storage tanks, the port, a crucial consolidation point for Kenyan tea exports before dispatch to destinations like Iran, Egypt, Pakistan, the UAE, Russia, and even Britain, ceased operations. This has created a logistical nightmare for Kenyan tea producers.

There are growing fears that Kenya will be unable to effectively ship its tea to these major markets, a development that significantly impacts hundreds of farmers affiliated with the Kenya Tea Development Agency (KTDA). The ripple effect of these trade disruptions is being felt keenly across the agricultural sector.

Thushara De Silva, Managing Director of Empire Kenya EPZ, echoed these concerns, pointing to a severe lack of available vessels as a primary cause of export delays. “We used to clear our cargo within two to three days, but now it is taking considerably longer,” De Silva commented. “Ships are taking an extended period to reach the Port of Mombasa, and some have even cancelled their planned trips altogether.”

The conflict, which has now entered its third week, was ignited by attacks involving the United States and Israel on Iran, prompting retaliatory actions by Iran against US and Israeli interests across several Gulf States. The subsequent closure of the Strait of Hormuz by Iran has effectively paralyzed shipping activities throughout the strategically vital region.

Floice Mukabana, CEO of the Kenya Export Promotion & Branding Agency (Keproba), emphasized that Kenyan exports, including tea, coffee, and meat, are among the hardest hit by the current geopolitical climate, with significant quantities now stranded at the port. Mukabana sees this as a critical juncture, urging Kenyan producers to actively explore and develop alternative markets within the African continent.

“The ongoing conflict in the Gulf region, which has led to the closure of key maritime routes, serves as a stark wake-up call for Kenya to significantly increase its investment in intra-Africa trade,” Mukabana stated. This strategic shift towards regional trade is seen as a crucial step in mitigating the risks associated with global supply chain disruptions and diversifying Kenya’s export base. The current crisis underscores the vulnerability of relying heavily on specific international markets and highlights the imperative for greater economic resilience through intra-continental partnerships.