Tea Sector Faces Mounting Pressure as Fuel Costs Surge, Says Gitwe Director

 The Kenya Tea Development Agency has raised fresh concerns over rising fuel costs and global economic disruptions, warning that the developments could significantly erode tea farmers’ earnings if urgent interventions are not undertaken.

According to David Muni Ichoho, Director of Gitwe Tea Factory and Zone 1, the sharp increase in fuel prices is already exerting pressure across the tea value chain, from production to processing and export logistics.

“The increase in fuel prices will have a direct and immediate effect on tea farmers’ earnings. Every stage of tea production and distribution relies heavily on fuel, and this will inevitably push operational costs higher,” said Mr. Ichoho.

He noted that ongoing geopolitical tensions in the Middle East have compounded the situation by disrupting key export routes, leading to shipping delays as well as increased freight and insurance costs.

“The tea sector depends significantly on global markets. Any disruption in international trade logistics affects our competitiveness and ultimately reduces returns to farmers,” he added.

Mr. Ichoho further warned that the rise in fuel prices is likely to trigger an increase in the cost of key farm inputs, particularly fertilizer, many of whose components are oil-based.

“Farmers should prepare for higher fertilizer costs in the coming months due to elevated global shipping rates and fuel prices. This will further strain already tight margins,” he said.

He called on factory boards and management to immediately implement austerity measures aimed at reducing operational expenses and enhancing efficiency in tea factories.

“We must adopt prudent cost management strategies. Efficiency is now critical to ensure that farmers’ earnings are protected despite the prevailing challenges,” he emphasized.

At the same time, Mr. Ichoho underscored the need to carefully manage labour costs, noting that labour remains the single largest expense in tea production.

“We must strike a balance between managing labour costs and maintaining productivity to sustain the sector,” he said.

He also urged the government to review the tax regime on tea, observing that the crop remains heavily taxed despite its central role in supporting millions of livelihoods and contributing to Kenya’s foreign exchange earnings.

“Policy support is essential at this time. Reducing the tax burden on tea will go a long way in cushioning farmers from the current economic pressures,” he stated.

Mr. Ichoho, who once served as the National Chairman of Kenya Tea Development Agency, noted that during his tenure he spearheaded key reforms that strengthened governance, improved operational efficiency, and enhanced transparency within the tea sector.

“The reforms we undertook have helped build a more resilient tea sector, better positioned to navigate challenges such as those we are currently facing,” he said.

He, however, issued a strong caution to the government over the continued rise in fuel prices, warning of potential public discontent if urgent action is not taken.

“The government must bring the cost of fuel down. If this situation persists, it risks triggering unrest across the country as the cost of living continues to rise beyond the reach of ordinary Kenyans,” he warned. 👍

He further urged immediate intervention to stabilize the situation and prevent wider economic fallout.

“The government must act with urgency to bring fuel prices down and safeguard the country from hyperinflation, which would have devastating effects on the economy and the livelihoods of millions of Kenyans,” he said.

He maintained that while the current economic environment presents significant challenges, the resilience of farmers, coupled with strong leadership and coordinated stakeholder action, will be key to sustaining the industry.

“Our farmers have always shown remarkable resilience. With the right policy support and internal efficiency measures, we can navigate these challenges and secure the future of the tea sector,” he said.