Kenya’s proposed 0.8% tea export levy may raise prices in Pakistan

Tea prices in Pakistan could rise if Kenya imposes a proposed 0.8% levy on tea exports, importers warned during a meeting with officials from the Tea Board of Kenya and Kenya’s Ministry of Investment, Trade and Industry at the Kenya High Commission in Islamabad in the last week of May.

Participants urged Kenyan authorities to withdraw the levy, which was announced in May.

Pakistan Tea Association (PTA) Chairman Muhammad Altaf said Pakistan is one of the largest buyers of Kenyan tea, importing around 36% of Kenya’s annual tea production of approximately 550 million kilogrammes, in addition to volumes that reach Pakistan through regional trading hubs.

He said the proposed levy would add to import costs at a time when Pakistan is already facing pressures from regional geopolitical developments, rising freight rates, higher packaging costs and other import-related expenses.

According to Altaf, the additional cost would ultimately be passed on to consumers, contributing to food inflation. He added that higher tea prices could reduce consumption and affect businesses throughout the supply chain.

He warned that if the levy remains in place, importers may increasingly turn to alternative suppliers, including Sri Lanka, Indonesia, Bangladesh and other African tea-producing countries.

The Pakistan Tea Association has also conveyed to the Kenyan High Commission that tea exports destined for Pakistan should be exempted from the proposed levy.