Kenya plans to ban direct tea sales and will enforce an electronic-trading auction system as part of reforms following an industry probe ordered by President Uhuru Kenyatta.
The industry investigation came after small-scale farmers complained about the Kenya Tea Development Agency, the company that markets most of the produce for the world’s biggest exporter of black tea.
Tea will “be sold exclusively through the auction process,” the Ministry of Agriculture said in the new regulations. “Henceforth, sale by private treaty, commonly known as Direct Sales Overseas, is outlawed.”
Tea production is threatened by the existing “dysfunctional” auction system, predatory behavior by KTDA and low and unstable tea prices, the ministry said. The weekly tea auction, held in the port city of Mombasa, is not automated.
Tea contributes about a quarter of Kenya’s total foreign exchange earnings and the East African nation earned 117 billion shillings ($1.1 billion) from exports last year, when it produced 458 million kilograms.