Allegations of corruption within the Kenya Tea Development Agency (KTDA) and dissatisfaction amongst the East African country's tea growers with the agency responsible for around two-thirds of Kenyan tea exports are contributing to a crisis within Kenya's tea industry.

This according to local analysts may precipitate the transfer of trade from the Mombasa Tea Auction (MTA) to the nascent Dubai Tea Trading Centre (DTTC), which last year began wooing tea traders with the prospect of favourable trading terms, including more convenient letter of credit (L/C) facilities.

Mombasa auction

Farmers who supply KDTA have threatened to stop picking tea. This according to local analysts would starve the MTA of its prime attraction, Kenyan tea.

The MTA, which itself gained prominence after the sudden collapse of the London Tea Auction in 1998, would then lose out to the DTTC the analysts told the East African Standard.

Dubai benefits

Last year DTTC representatives visited Mombasa, wooing key industry players with a number of incentives, including easier access to L/Cs, free warehousing and up to 60 days of storage. (DC World News, 28 October 2005).

Kenya is not the DTTCs' only African target, and the MTA could lose out on business derived from selling tea produced in other African countries, including Uganda, Tanzania, Rwanda, Malawi, the Democratic Republic of Congo, Burundi, Zambia, Madagascar, Zimbabwe and Mozambique.

Opportunity

KTDA, however, sees DTTC as an opportunity not a threat. "We are in the business of producing and supplying the global market with quality tea at the best possible prices. Therefore, Dubai is a marketing opportunity for our tea," the agency told Kenya's Sunday Standard.

Financial mismanagement is the main cause of complaint about KDTA from tea growers, but there are also allegations of corrupt price fixing within the agency.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.