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Iran war derails talks on Sh5.6bn Kenya tea deal
Birds fly as smoke rises following an explosion, after Israel and the US launched strikes on Iran, amid the US-Israel conflict with Iran in Tehran, Iran on March 2, 2026.
Talks between Kenya and Iran on the resumption of tea exports have been thrown into uncertainty as the US-Israeli war against Tehran widened on Monday and looked set to last for weeks.
The two countries had established a joint committee to remove trade obstacles and lift the ban on Kenyan tea exports to Iran worth nearly Sh5 billion.
The joint committee was expected to develop a framework to restore trust, enforce quality standards, and facilitate the resumption of tea exports within the 60-day deadline.
The embargo has significantly impacted Kenyan tea farmers and exporters financially, intensifying calls for a swift resolution. Now, two key events look set to derail the talks.
The widening of war in the Middle East, with Tehran launching attacks on Israel and several neighbouring Gulf states to retaliate the joint US-Israel strikes, has seen Kenya become lukewarm to the trade talks.
In addition, US President Donald Trump last month signed an executive order directing that countries doing business with Iran would be subjected to a 25 percent tariff on trade with the US, including on permitted essential items like food, medical and home appliances.
Commercial ties between Iran and many countries have been curbed by heavy US sanctions on Tehran.
Kenya’s tea exports were cushioned from the sanctions, but Iran imposed a ban following an alleged criminal trade malpractice involving a Kenyan firm, which led to the suspension of shipments to the Middle Eastern nation.
Before the suspension, Iran was among Kenya’s top importers of tea.
Kenyan officials have remained mute over negotiations to resume the tea shipments, even as Iran’s ambassador to Kenya, Ali Gholampour, promised the relations will resume after the tensions.
“There are a few issues that we need incorporation from GOK (Government of Kenya) to resolve them. Just after these tensions, we will get back to these bilateral relations and I hope we can increase the level of relations,” he said at press conference in Nairobi following the attacks.
A top official in the Trade ministry, who spoke on condition of anonymity to candidly discuss the matter, reckoned that Kenya is going slow on the talks to avoid upsetting the US and Gulf states that had come under attack from Iran, notably the United Arab Emirates (UAE).
He said Kenya’s release of a statement condemning Iran’s strikes on the UAE, Qatar, Saudi Arabia, Iraq, Oman, Kuwait, Jordan and Bahrain illustrated Nairobi’s attempts to align with the Emirates and the US.
Israel launched new air strikes on Monday targeting Iran and expanded its military campaign to include attacks on Iran-backed Hezbollah militants in Lebanon, while Tehran fired missiles and drones at Israel, Gulf states and a British air base in far-away Cyprus.
The Kenyan stance on the Iran war comes in a period when relations between Nairobi and the UAE have strengthened in a shift that underlines the growing clout of the Emiratis in Africa.
The Gulf state has established itself as a top four investor in Africa alongside the US, China and the European Union.
Kenya has in recent years secured a multi-billion shilling loan from the UAE, entered into a direct petroleum importation agreement with the UAE and Saudi Arabia and signed a trade pact with the Emiratis.
The UAE also provided a private jet used by President William Ruto during his four-day state visit to the US in 2024.
Mr Trump said US attacks on Iran would escalate, with “the big wave” still ahead, indicating a prolonged war.
Lee Kinyanjui, the Cabinet Secretary for Investments, Trade, and Industry, didn’t respond to Business Daily’s calls and text messages inquiring about the talks with Iran.
In 2024, the country shipped about 13 million kilogrammes of tea to Iran, worth roughly $43.7 million (Sh5.6 billion), according to industry data.
Those sales stopped early last year after Iranian authorities imposed the ban following a fraud case in which low-grade tea was falsely marketed as premium.
Iranian courts moved in, and assets were recovered and officials jailed. Kenya lost a steady outlet that had helped stabilise prices at the Mombasa auction.
“We are working to restore confidence and stabilise trade,” Mr Gholampour told the Business Daily in an interview before the joint US-Israel strikes.
“The process is practical, time-bound, and focused on reopening shipments.”
He said the demand for Kenyan tea never vanished.
“The quality of Kenyan tea is exceptional, demand remains strong, and Iranians love Kenyan tea,” Mr Gholampour said, arguing that Tehran wants the corridor reopened with safeguards.
He also pointed to the court cases that triggered the ban.
“In Iran, those implicated in the fraudulent scheme have been tried and punished by the courts, with senior officials and the mastermind receiving lengthy prison sentences and orders to repay billions of dollars to the state,” he said.
“Among them are government ministers, CEOs, and private individuals.”
The joint committee, he said, was now working on sharing information, aligning standards, and setting verification steps to prevent a repeat.
“This is a win-win,” the envoy said. “Iran regains access to high-quality tea from Kenya, while Kenya re-enters a lucrative market.”
The envoy said progress depends more on political will than bureaucracy. While he did not specify timelines for resolving the impasse, he said that measurable progress is underway.
The focus, he said, is resolving outstanding issues, agreeing on verification steps, and reassuring buyers and consumers that shipments meet agreed standards.
Tea sustains more than 750,000 smallholders across 19 counties and supports about 6.5 million livelihoods.
When Iran shut its door, factories felt the squeeze as cash flows tightened.
Kenya has tried to cushion the blow by exploring alternative markets in Germany and Kazakhstan.
