Kenya Tea Rebounds Reforms Laws Reshape Sector

Kenya’s tea industry has staged a strong recovery, posting a total marketed value of Sh218.79 billion in 2025, driven by sweeping reforms, expanded global markets and a renewed focus on quality and value addition.

Agriculture CS Mutahi Kagwe said the sector’s rebound marks a deliberate shift towards a more competitive and farmer-focused industry.

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He spoke during the release of the 2025 Kenya Tea Industry Performance Report at Rukuriri Tea Factory in Embu county.

“This performance is not accidental. It is the result of deliberate reforms, market expansion and a renewed focus on quality and value addition under the Bottom-Up Economic Transformation Agenda,” Kagwe said.

The performance comes against a backdrop of global economic uncertainty, including the effects of the Russia-Ukraine war and conflicts in Sudan and Yemen, which disrupted key markets.

Despite these challenges, the sector recorded growth across all major indicators, underlining its resilience and strategic repositioning.

Export earnings rose to Sh186.91 billion, a 2.87 per cent increase, while export volumes rose to 652.8 million kilogrammes, up by 9.81 per cent.

Domestic sales also improved to Sh19.13 billion, reflecting a six per cent rise, while the total marketed value grew by two per cent from 2024 and 11 per cent from 2023.

Kenya also expanded its global footprint, exporting tea to 100 markets in 2025, up from 96 the previous year.

Emerging markets posted the most significant gains, with Ireland, Japan and Kazakhstan recording sharp increases, while traditional buyers such as Pakistan and Egypt maintained steady growth.

The recovery follows a difficult 2024 season when a bumper harvest, combined with carryover stocks from 2023, created a global glut of CTC tea and depressed prices.

Kagwe said the government responded by shifting focus from volume-driven exports to quality, value addition and targeted market segmentation.

“At the height of the glut, we made a choice not to retreat but to reform. What you are seeing now is the beginning of a smarter, more competitive tea economy,” he said.

As part of the reforms, the government has introduced new legal frameworks aimed at transforming the sector.

Kagwe announced the enactment of the Tea (Registration and Licensing) Regulations, 2026 and the Tea (Levy) Regulations, 2026 to enhance accountability, streamline operations and protect farmers.

The new regulations introduce a comprehensive registration system covering all players in the tea value chain, including farmers, factories, exporters and brokers.

They also target long-standing challenges such as green leaf hawking, exploitation by middlemen, delays in leaf collection and falsification of weighment, with strict penalties for violations.

In addition, the laws tighten controls on tea imports to curb the dumping of low-quality products that undermine Kenya’s global pricing and reputation.

A key pillar of the reforms is the introduction of a 0.8 per cent export levy on tea and a 100 per cent levy on imports.

The levy will fund global marketing, research and development, infrastructure in tea-growing regions and regulatory oversight, providing a sustainable financing mechanism for the industry.

“For too long, Kenya has produced some of the best tea in the world but invested too little in marketing it. That changes now,” Kagwe said.

To further strengthen market access, the Tea Board of Kenya is set to launch a business-to-business e-commerce platform that will directly connect producers with international buyers, reducing reliance on traditional trading channels and improving price discovery.

At the same time, the government is deepening trade diplomacy under frameworks such as the African Continental Free Trade Area (AfCFTA), securing value addition opportunities in markets like Egypt’s Alexandria Free Zone and expanding bilateral trade with countries including Algeria and Morocco.

The reforms are anchored on the government’s broader Bottom-Up Economic Transformation Agenda, which targets increased earnings for smallholder farmers from Sh59 per kilogrammes in 2022 to Sh100 per kilogrammes by 2027.

With over 834,000 smallholder farmers and more than 6.5 million Kenyans dependent on the tea value chain, Kagwe said the transformation of the sector is both an economic necessity and a social priority.

“Our tea is not just a commodity; it is the ‘Tea Promise’ of a prosperous Kenya,” he said.

The 2025 performance signals more than a recovery for the tea sector. It marks a structural reset built on quality, compliance, value addition and global branding, positioning Kenya as a premium producer capable of commanding higher returns for its farmers.

However, a section of tea directors from the region have been lobbying to have some of the reforms done away with saying they will cost the farmer over Sh5 billion annually.

Two weeks ago, directors from 10 tea factories in Murang’a county met local MPs to push for the amendment the Tea Amendment Bill 2023.

They cited among other issues the Tea levy saying if it must be retained, it should follow the structure outlined in the Tea Act 2020, where 50 per cent goes to price stabilisation, 20 per cent to research, 15 per cent to TBK and 15 per cent to infrastructure.