KTDA warns of lower tea earnings as fuel costs rise

Tea farmers in Kenya are facing the prospect of lower earnings this year as rising fuel prices and global supply chain disruptions drive up production and export costs, the Kenya Tea Development Agency (KTDA) has warned.

KTDA National Chairman Enos Njeru said the sector is already feeling the weight of external pressures, with higher fuel costs and instability in the Middle East affecting key shipping routes.

This, he noted, is increasing the cost of inputs and slowing down exports, placing farmers’ incomes at risk.

“The recent increase in fuel prices is expected to negatively impact tea farmers’ earnings this year,” he said on Thursday, noting that the ongoing conflict in the Middle East has disrupted key export channels.

Njeru spoke in Naivasha during a meeting with chairpersons of KTDA-managed factories, where he outlined the growing challenges facing the tea industry.

He pointed out that delays in shipping, along with higher freight and insurance charges, are adding to the financial strain.

According to him, the situation is expected to worsen in the coming months as input costs rise further, especially fertilizer.

He explained that the increase in fuel prices is likely to push up fertilizer prices, given that some of its components are oil-based and global shipping rates remain high.

“The rise in fuel prices is likely to drive up the cost of fertilizer expected in June, as some fertilizer components are oil-based and global shipping rates remain elevated,” he explained.

The KTDA chairman, accompanied by members of the KTDA Holdings Board, was speaking during a labour management training held in partnership with the Federation of Kenya Employers.

The forum brought together factory leaders to address operational challenges in the tea sector.

Also at the meeting, KTDA Board Vice Chairman Samson Mosonik stressed the need for factories to control internal costs.

He said labour remains the biggest expense in tea production and called for better management to improve efficiency and protect farmers’ returns.

With pressures mounting, Njeru urged factory boards and management teams to act quickly to cut costs and cushion farmers from the impact of the current challenges.

“We must implement austerity measures to reduce operational costs and mitigate the impact of rising fuel prices and global disruptions,” he urged.

He also appealed to the government to review taxes on tea, saying the crop carries a heavier tax burden compared to others.

He called for targeted support to help farmers cope, warning that without intervention, the sector could face deeper financial strain in the months ahead.

Global oil markets have remained unstable due to tensions in the Middle East, disrupting major shipping routes such as the Red Sea and the Strait of Hormuz.

This has pushed up freight and insurance costs and driven fuel prices higher.

For Kenya, which depends on imports for petroleum, the result has been increased landing costs.

The effects have spread across the economy, raising transport and production expenses, as well as the cost of key inputs like fertilizer, putting added pressure on export sectors such as tea.