Kenya is losing an estimated Ksh 3.1 billion ($26 million) as the US-Israel-Iran conflict disrupts export routes through the Red Sea and Middle East. More than 2 million kilograms of tea weekly are affected.
The Port of Mombasa, East Africa’s largest maritime gateway, has seen war risk insurance premiums skyrocket, prompting major shipping lines to reroute around the Cape of Good Hope. Kenya exports tea worth $32.8 million annually to Iran alone.
Agricultural economists warn that smallholder farmers — who produce nearly 60 percent of Kenya’s tea through the Kenya Tea Development Agency — face delayed payments as factories tighten belts and auction prices fall by more than 12 percent.
The government is exploring alternative export routes including rail freight through Lamu Port. The horticulture sector employs more than 6 million Kenyans directly and indirectly.
Industry insiders say the long-term solution lies in diversifying export markets toward Africa, Southeast Asia and Latin America. Currently, more than 40 percent of Kenya’s tea exports go to just three markets: Egypt, Pakistan and Iran.