The biggest threat to the Kenyan tea industry is not the abrupt convulsions of the global market but the people managing the factories that feed it, according to a new report submitted to lawmakers.
- •A parliamentary inquiry into tea pricing has concluded that the sector’s deepest wounds are self-inflicted: mismanaged factories, wasteful boards, stalled investments, and regulatory overreach that has choked efficiency at every turn.
- •The report’s starkest finding confirms the widening divide between the prices of tea produced from factories in the east of the Rift Valley (mostly tea zones in the Central Kenya region) and those from the west of the Rift Valley.
- •The audit was conducted after uproar from members of parliament from the west of the Rift Valley region over the disparity of the prices fetched in the Mombasa auction, conveying their constituents’ dissatisfaction with bonus payments that are significantly lower than those of east zone farmers.
In a meeting with the Tea Board of Kenya (TBK), the committee established that over the past five years, major buyers of the country's tea including Pakistan and Egypt have preferred tea quality from the east of the Rift Valley. As tea prices crumble globally, the less preferred leaf from the west of the Rift Valley suffers an even greater drop in price at the auction.
The inquiry reported that tea factories in the east of Rift operate with austere discipline; reflecting tighter agronomy, timely leaf collection, and lean management thus yielding better quality tea at lower cost. West of Rift factories, by contrast, are drowning in weak governance, inflated expenses, and capital stranded in half-finished hydropower schemes.
Some boards in the region even took out loans to pay bonuses, a decision that now burdens farmers with debt for rewards they never truly earned. According to an audit by TBK, the outstanding debt owed by tea factories in the West of Rift region is KSh 21.6 billion (83% of the total) compared to just KSh 4.45 billion owed by their eastern counterparts.
Moreover, the tea quality between both regions was masked by the price floor enacted between 2021 and August 2024. The mandate assured tea producers that the auction prices will not sink further than US$2.43 per kilo of tea to stem losses as the global market stumbled.
The minimum reserve price saw many factories from the west of the Rift Valley sacrifice quality for quantity, producing more tea leaves that were of bad quality. The combination of these factors led to a bulk of the tea leaves remaining unsold for years at the Mombasa auction as buyers could not purchase them above the price floor that had been set.
Following the scrapping of the price floor in 2024, the accumulation of old stock plus the higher production of tea that year increased market selectivity and depressed tea prices. Higher quality tea from the east zones can survive these tough market changes but lower quality tea, which is higher in volume, suffers greatly at the auction’s unforgiving eye.
The committee’s assessment paints the West’s factory floors as monuments to misaligned incentives. Directors convene endlessly, collect allowances with equal enthusiasm and preside over plants running on outdated equipment and expensive fuel. Poor leaf handling, storage, plucking cycles, and rampant hawking further depress quality in the region, driving down auction prices and widening the rift between the regions.
The Kenya Tea Development Agency (KTDA) also told the committee that quality in the West zone is compromised by natural geographic factors like soil and rainfall distribution. Moreover, the prices of tea have been affected by rising compliance burdens and labour costs that push many estates toward mechanisation.
Trade Diplomacy, and the Urgency
The collapse of demand in Iran, Sudan, and Pakistan; three markets that once absorbed Kenya’s lower-grade teas, has exposed how little the country has invested in trade diplomacy. The promised gains of AfCFTA remain mostly theoretical, and the global oversupply has punished producers who lack the marketing muscle to differentiate their product.
The inquiry argues that modernisation cannot wait. Factories need new machinery, alternative energy sources, and diversified product lines if they are to stay relevant in a market that increasingly rewards specialty teas and traceability. Funding for the Tea Research Institute has lagged, leaving Kenya’s signature crop vulnerable in a world where quality benchmarks keep tightening.
KTDA has also been urged to explore private power generation to cut the energy costs for many factories. On the other hand, the hydropower plant projects in many west zone factories will be scrutinized by the TBK to determine if they are financially reliable.
Yet even the most advanced machinery will not rescue a governance culture in the west of the Rift Valley that treats farmers’ earnings as an afterthought. The report calls for lifestyle audits, stricter oversight of factory boards, and full implementation of the Tea Act.
To steady the industry, Agriculture Cabinet Secretary Mutahi Kagwe told parliament that the state will roll out mandatory quality standards, a new Mombasa quality laboratory, factory modernisation via a KSh 3.7 billion concessional loan.
The ministry is weighing a shift to quarterly bonus payments to ease farmers’ cash flow. The reforms amount to the government’s strongest attempt yet to impose order on an industry whose troubles stem as much from internal misrule as from global headwinds.
