NEWS

Government to extend tea business days – KBC

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The Mombasa Tea Auction will start operating five days a week to increase its capacity to handle all locally produced tea in the region.

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An increase in the number of business days will take place after the auction rules are enacted as stipulated in the Tea Act 2020.

The new marketing system set at a cost of Ksh 217 million from the Danish Development Agency as a major sponsor and Trade Mark East Africa (TMEA), will enable players to run it from their homes and offices.

The Secretary of the Agricultural Cabinet, Peter Munya, noted that initially the tea auction was run three days a week but since the business has become electronic and the lists can now be produced online, it was time to move on and extend the time.

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“It is important to note that tea auctions should now be held throughout the week and not necessarily three days as currently selected by the Secretariat of the East African Tea Traders Association (EATTA),” he said.

Munya in a statement on Tea Auction operations, went on to say that tea exploitation in the offer should be improved as the system should be able to automatically list tea sold on the same day of the auction, saying this along with an anonymous tender, should increase order of price discovery for commercial tea.

“All of this is being done under a new tea reform that is being introduced by the government for the benefit of increasing accountability and transparency in the industry, even if other value chain players strongly oppose it,” Munya stressed.

The Mombasa Tea Auction for example is owned and operated by value chain players, and the Kenya Tea Development Authority (KTDA), being one of the most dominant players.

In last Friday’s investigative and investigative activities of officials from the Attorney General’s Office (AG), CS denied allegations that there was a disruption, saying the week’s schedule was overseen by auctions that needed to be implemented.

“Reports carried out in the media section indicate that last Friday the AG’s activities at the Mombasa Tea Auction Secretariat offices adversely affected the regular auction schedule is not true” he confirmed.

Munya explained that the EATTA Secretariat allowed the AG’s office to complete its investigation on Monday and that all three actions were carried out within two days instead of three and 12.64 million Kilograms were sold for sale so there was no negative impact on the business.

In the reorganization of the business that was done by EATTA, CS said it was not acceptable, as the investigation would not discontinue any business later as the auction was conducted online and the trading platform was based on the web.

Mombasa tea auction in a major business center of more than 450 million kilograms of tea annually from an average of 650 million kilograms produced in ten countries within the region, out of the total tea sold, 78 percent of the quantity comes from Kenya.

The auction has representatives from overseas tea buyers and agents drawn from more than 70 markets around the world, with exports being Pakistan, Egypt, UK, Russia, UAE, Sudan, Yemen, Kazakhstan, Poland and Jordan, closely controlled 85% of purchases.

The amount of tea produced and sold weekly also varies from eight kilos to 13 million, depending on the season, when the average value of tea sold is around Sh2 billion.

The new Tea Act 2020, the Government banned the sale of tea directly and instead ordered all the tea produced here to be sold through the Auction.

Since 2017 EATTA has been working on a new online system with support from donors and started operating six months ago.

Attorney General’s officials had raided last week the offices of the Kenya Tea Development Authority (KTDA) in Nairobi and the EATTA offices in Mombasa, investigating violations of KTDA directors, as well as possible price and auction scams, spending the evils of governance, domestic trade and other evil practices within the Tea Body.

KTDA is the third largest buyer at Mombasa Auction, controlling 10 percent of auction purchases based on volume.

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