OPTIONS

Kenya banks on Iran for tea sales as Pakistan cuts imports

Iran and Democratic Republic of Congo have been identified as potential markets

In Summary
  • Pakistan has traditionally accounted for 50% of Kenya's tea exports
  • Last month Pakistan asked its citizens to cut tea consumption to two cups daily as the country battles the highest inflation in four decades.
Kenya National Chambers of Commerce President Richard Ngatia with Livestock PS Harry Kimtai during a round table meeting with Kenya Exporters at Movenpick Hotel in Nairobi on July 27,2022.PHOTO/ENOS TECHE
Kenya National Chambers of Commerce President Richard Ngatia with Livestock PS Harry Kimtai during a round table meeting with Kenya Exporters at Movenpick Hotel in Nairobi on July 27,2022.PHOTO/ENOS TECHE
Image: ENOS TECHE

Kenya is considering increasing its tea export share to Iran and other countries in Asia to cover for expected low demand in Pakistan.

Speaking during the Exporters forum held in Nairobi on Wednesday, Kenya National Chamber of Commerce and Industries chairman Richard Ngatia said they are wooing Iran to increase its tea imports from the current 56 per cent to 100 per cent.

The Democratic Republic of Congo was identified to be of great potential as a  tea export market as the average tea consumption is 10 cups per day.

"Apart from Iran, we want to increase our share of export to United Arab Emirates, Malaysia and Egypt to cover for expected low demand in Pakistan that imports 50 per cent of our tea, "Ngatia said.

Last month Pakistan asked its citizens to cut tea consumption to two cups daily as the country battles the highest inflation in four decades.

According to the latest Export Performance report tea was among Kenya’s export products to Pakistan that dropped in the year 2021 from Sh52.8 billion in 2020 to Sh51.4 billion in 2021.

The Asian country seeks to cut high import bills as its foreign currency reserves continue to fall rapidly, putting pressure on the government to cut import costs and keep funds in the country.

Pakistan's forex reserves dropped from around $16 billion in February to less than $10 billion in the first week of June, barely enough to cover the cost of two months of all its imports.

Harry Kimtai principal secretary State Department for Livestock, Ministry of Agriculture said that tea production in the country has been increasing for the past 10 years.

"One of our key export products is tea and statistics show that there is growth in tea consumption in Iran, one of our importers and we are planning to increase trade in that direction," said Kimtai.

Other large importers of Kenyan tea according to the latest Kenya Economic Survey in metric tons include Egypt(9,252), United Kingdom(3,275), United Arab Emirates(2,844), Russia(2,127), Sudan(2,043), Yemen(1,297), Kazakhstan(800), Poland(527) and Jordan(479).

According to the report in January 2022, the export value of tea in Kenya decreased to  Sh12.6 billion, ($109 million).

In the previous month, the amount was measured at Sh12.7 billion ($109 million ).  

Overall Kenyan exports grew by more than Sh2 billion in Uganda (Sh18.2 billion), Tanzania (Sh13.2 billion), Netherlands (Sh12.9 billion) and  D.R.C (Sh10.2 billion).

Other countries were the U.S.A (Sh10.2 billion), China (Sh7.1 billion), Rwanda (Sh4.8 billion), Ethiopia (Sh3.8 billion), Zambia (Sh3.6 billion), India (2.7 billion), Russia (Sh2.5 billion), Egypt (Sh2.2 billion), Somalia(2.1 billion).

Comparatively, there were specific markets whose performances declined including South Sudan (Sh6.0 billion), Pakistan (Sh1.5 billion), Sudan (Sh1.0 billion), the UK (0.5 Billion), and Saudi Arabia (Sh0.5 billion), and Germany (0.3 billion).

The annual performance in  2021 was a better performance compared to 2020.

It was, by and large, indicative that Kenya’s export sector is resilient and can still compete globally.

While the general global business environment remained rather uncertain due to Covid19 Kenya registered growth mainly due to the relatively inelastic demand of fruits and vegetable demanded globally.

It optimistically projected that continued marketing action and market access measures would support export performance.