Kenya’s tea sector is facing economic headwinds as leading producers Williamson Tea Kenya and Kapchorua Tea issue profit warnings, projecting a decline of over 25 per cent in earnings for the financial year ending March 31, 2025.
The firms attribute the dip to depressed global prices and a stronger Kenyan shilling against the U.S. dollar, which is reducing export revenue. “The drop in profits is largely attributed to depressed market prices following an oversupply of tea against demand as well as a strong Kenya shilling against the US Dollar,” both companies stated.
Williamson Tea, which posted a profit of Sh527 million in 2024, expects its earnings to fall to Sh395 million. Kapchorua, which had improved its profit from Sh315 million in 2023 to Sh399 million in 2024, now anticipates a decline to Sh299.25 million.
Despite individual company struggles, the broader tea industry recorded growth. According to the Kenya Tea Industry Performance Report 2024 by the Tea Board of Kenya, total tea earnings rose 9 per cent to Sh215.21 billion. Export earnings increased marginally by 1 per cent to Sh181.69 billion, buoyed by a 14 per cent rise in export volumes to 594.50 million kilograms.
However, average export prices dropped from $2.47 per kilogram in 2023 to $2.27 in 2024, and the mean exchange rate fell to Sh130 against the dollar from Sh139.85 — reducing profitability.
Kenyan tea reached 96 countries in 2024, up from 92 the previous year. Pakistan remained the top market, importing 206.27 million kilograms worth Sh70 billion. Egypt, India, the UK, and Russia also showed significant increases, while Chad emerged as a notable new market due to Sudan’s internal conflicts.
Nevertheless, not all markets showed gains. Exports to Sudan dropped by 12 per cent, and shipments to Pakistan decreased by 2 per cent due to new sales tax policies.
As global dynamics continue to shift, Kenyan tea producers face a tough balancing act between boosting volumes and navigating volatile international markets.
