Strict scanning rule leaves tonnes of export tea stuck in Mombasa

East Africa Tea Trade Association stakeholders during an auction at Tea Trade Centre in Mombasa. The association on June 2, 2015 said the stringent scanning measures introduced by KRA, though welcome, were reducing volumes of the cash crop exported. FILE PHOTO | NATION MEDIA GROUP

What you need to know:

  • With up to 75 containers exported each day, the figure has dropped drastically to less than 30 per cent, according to the East Africa Tea Trade Association (Eatta), which manages the Mombasa Auction.
  • Produce from Kenya, Uganda, Tanzania, Rwanda, Burundi, Democratic Republic of Congo, Malawi, Madagascar, Mozambique and Ethiopia is sold at the auction.
  • According to Eatta, daily tea shipments account for up to $5 million (Sh490 million), which translates to about 500 containers worth $35 million (Sh3.4 billion) every week. Currently, only 20 per cent of the consignment is shipped, which means the tea industry has been losing $25 million (Sh2.4 billion) per week over the past fortnight.

Hundreds of containers loaded with tea for export are stuck at the Mombasa port after the Kenya Revenue Authority introduced strict scanning procedures to check export of contraband and illegal goods.

At the end of April, 511 pieces of ivory weighing over three tonnes were found in Bangkok in a container marked tea leaves.

Earlier, on April 20, another four tonnes of ivory were seized at Bangkok’s main port in a container shipped from Mombasa but originating from the Democratic Republic of Congo.

These findings led KRA to introduce 100 per cent scrutiny where initially, tea was exempted from scanning, with loading being supervised by customs officers.

This has plunged the cash crop’s export business into a crisis, with more than 300 containers said to be stuck either at the port or various warehouses waiting to be taken to the port.

With up to 75 containers exported each day, the figure has dropped drastically to less than 30 per cent, according to the East Africa Tea Trade Association (Eatta), which manages the Mombasa Auction.

Yesterday, Eatta protested over the delays, saying exports had been severely affected.

“The current backlog of containers destined for export as a result of stringent measures and regular breakdown of scanners and the e-mail system between KRA and KPA (Kenya Ports Authority) has put the operations of the tea industry into jeopardy,” said the association’s managing director, Mr Edward Mudibo.

Due to the delays in shipping of the commodity, average prices of tea at the largest auction in the world have started to drop just when they were starting to pick up, he added.

Tea is Kenya’s largest foreign exchange earner, accounting for 25 per cent of export earnings and four per cent of the GDP.

On May 26, KRA Commissioner-General John Njiraini held talks with the tea industry stakeholders in Mombasa and promised to address the delays.

Contacted for comment yesterday, the commissioner of customs, Mr Julius Musyoki, directed the Nation to Ms Grace Wandera, in charge of communications at KRA.

Produce from Kenya, Uganda, Tanzania, Rwanda, Burundi, Democratic Republic of Congo, Malawi, Madagascar, Mozambique and Ethiopia is sold at the auction.

According to Eatta, daily tea shipments account for up to $5 million (Sh490 million), which translates to about 500 containers worth $35 million (Sh3.4 billion) every week. Currently, only 20 per cent of the consignment is shipped, which means the tea industry has been losing $25 million (Sh2.4 billion) per week over the past fortnight.

“Matters are bound to be worse when the weekly auction sale volumes rise from the current 5.2 million to the standard 8.5 million kilogrammes,” Eatta said in a statement.

It now takes 36 hours from the time a container leaves the warehouse to the time it is loaded, as opposed to less than six hours previously, with transporters now raising their rates since they take hours waiting to deliver the cargo.

The Kenya Ship Agents Association (KSSA) said although it was supportive of the procedures, it could result in declined exports, and deny the exchequer foreign currency. To mitigate the situation, KSSA suggests that KRA should appoint accredited inspection firms to supervise loading of containers at the port.

“We are also proposing that a weighbridge with scanners should be installed at the KPA gates for weighing each and every tea export prior to entry into the port,” said the association’s chairman, Mr David Mackay, in a letter to KRA.