How Iran war is set to hurt over 700,000 tea farmers across 16 counties

Oman's port of Salalah, which was hit by missile five days ago

The indefinite closure of the Port of Salalah in Oman following a missile attack spells doom for more than 700,000 tea farmers affiliated with the Kenya Tea Development Agency (KTDA).

This is after it emerged that KTDA is unable to ship its tea to export markets, as the port is a major shipping point for Kenyan tea to markets in both the Middle East and Europe.

Oman’s Salalah Port suspended all terminal operations until further notice on March 11 after several drones struck its fuel storage tanks, according to a customer advisory notice.

“The Port of Salalah is where the consolidation of our tea exports is done. It’s from there that tea is dispatched to Iran, Egypt, Pakistan, UAE, Russia and even to Britain. Its closure means we are hit,” Gabriel Kagombe, a director at KTDA, said.

Already, the Kenya Ports Authority (KPA) has asked the agency to stop delivering containers to the Port of Mombasa since no ship has left and its storage capacity has been exhausted.

By Monday morning, KTDA had begun returning some of the containers from the port to its warehouses.

“Our tea is stuck at Mombasa port while our warehouses will soon be full,” he said, adding that KTDA exports about 70 containers per week.

Kagombe, who is also the Gatundu South MP and sits on the National Assembly Departmental Committee on Agriculture, is now warning that the Iran war will hurt Kenyan tea farmers.

“I don’t want to be alarmist, but farmers should be ready for the worst if the war doesn’t end. This war has hit deep in our hearts. It is hard-hitting for us as tea farmers. We may not be able to pay a mini-bonus or the Sh30 per kilo as we had begun last month.”

The war, now in its 18th day, was triggered after the United States and Israel attacked Iran, which in self-defence resorted to attacking US and Israeli interests in several Gulf states. Iran has also closed the Strait of Hormuz, paralysing the shipping industry.

Apart from the cost of petroleum rising, farmers are also being warned that fertiliser will be supplied at a higher cost.

“The cost of urea went up by US$100 in the first four days of the war, while fertiliser prices are going up by 1,000 per cent due to the cost of shipping,” Kagombe said, adding that the alternative of shipping tea to some markets will take an extra 46 days, translating to additional expenses.

The current war has not only interfered with trade routes but is also likely to compromise traditional market countries.

“Sixty-five percent of our tea is consumed by Muslim-majority countries; this war affects their purchasing power and ends up reducing their orders. Farmers have to be ready for the worst,” the MP said.

As a result of the failure to export tea, operations at the 71 KTDA-managed factories across the 16 tea-growing counties are likely to grind to a halt.

With the crisis coming during a rainy period when tea production is high, farmers are facing the likelihood of KTDA closing operations in their factories due to capacity challenges.

“Most of our factories have a storage capacity of ten days. After that they will stop production. This means we will not even pay this year’s mini-bonus,” Kagombe said.

Pakistan, the largest buyer of Kenyan tea, absorbed 21.14 million kilograms of tea in November, which is just over 40 per cent of the total exports.

Behind it came Egypt (5.15 million kgs), the United Kingdom (5.14 million kgs), Russia (2.87 million kgs) and Kazakhstan (2.64 million kgs).

The rest of the top ten include the United Arab Emirates (UAE), Yemen, India, Iran and Oman, most of which are in the Gulf region.

Data from the Tea Board of Kenya shows that in 2024, total earnings from tea amounted to Sh215.21 billion.

Out of this, Sh181.69 billion was earned from exports, Sh18.00 billion from local sales and Sh15.52 billion from committed stocks.

This was an increase of 9 per cent from the marketed value of Sh196.97 billion recorded in 2023.