Kenyan tea growing companies now face their latest challenge as the commodity’s exports to Iran, a main importer of Kenyan tea, come under threat owing to US trade sanctions placed on Iran which have diminished the country’s US dollars used for importing goods, the Business Daily reports. From 2007 to 2011, Kenyan tea exports to Iran increased fivefold from 1.1 million kgs to 5.4 million kgs respectively according to the Ministry of Agriculture.

The compromised Iranian tea market is the latest in a number of recent setbacks that have faced the Kenyan tea industry which is the world’s biggest exporter of black tea. Five tea growing and processing companies are listed on the Nairobi Securities Exchange namely: Sasini Ltd, Limuru Tea, Kakuzi, Williamson Tea Kenya Ltd, and Kapchorua Tea Company (NSE).

Due to poor weather conditions, Kapchorua and Williamson tea both recorded reduced earnings for the year ended 31^st March 2012, with Kapchorua’s profit before tax falling 58 percent to 113 million shillings from 268 million shillings in the same period last year, and Williamson’s profit dipping 10 percent to 1.163 billion shillings from 1.294 million shillings last year (Bloomberg).

Limuru Tea’s earnings last year declined 43 percent to 59.9 million shillings from 104.3 million shillings in 2010 according to the company’s website.

In January this year, tea production was negatively affected by the worst case of frost to hit the country according to Alfred Njagi, the General Manager of Operations at the Kenya Tea Development Agency, a report in the Standard wrote. Up to 1 billion shillings worth of tea leaves were damaged in a one week period during the frost, the report added.

Due to the drought and frost experienced early this year, tea output had dropped 15 percent by the end of this year’s first quarter (Reuters). In addition, the Tea Board of Kenya announced two months ago that tea production is expected to decline by 5 percent this year due to the prolonged dry season experienced in the initial months of the year (Chinadaily).

Tea exports are the Kenya’s biggest foreign exchange earner, having earned the country 109 billion shillings last year.