The volume of unsold tea at the Mombasa Tea Auction has risen to its highest level this year, raising concerns within Kenya's tea industry over the impact of new taxation measures and weakening demand in key export markets.

A significant portion of tea offered for sale failed to attract buyers, with exporters linking the trend to the government's 1.5% export and investment promotion levy, which they say has increased the cost of Kenyan tea in a highly competitive global market.

The development comes as Kenya, the world's largest exporter of black tea, continues to face shifting global demand patterns, currency pressures in importing countries, and increased competition from producers such as India, Sri Lanka, and Uganda.

Despite the slowdown at the auction, Kenya continues to maintain strong production levels and earns more than Sh180 billion annually from tea exports, making it one of the country's leading foreign exchange earners.

However, stakeholders caution that sustained increases in unsold volumes could place downward pressure on prices, reducing returns for farmers across the value chain.

Source: Africa Business News (Extracts), Courtesy: Tea Exporters' Association Sri Lanka