•The IMF team, which leaves Islamabad on Friday, said "considerable progress" had been made after 10 days of talks.
•Pakistan accounts for up to 40 per cent of Kenyan tea exports.
Eleventh-hour negotiations between Pakistan and the International Monetary Fund (IMF) have failed to unlock $1.1 billion (Sh125.04 billion) in crucial funds aimed at preventing the country from going bankrupt.
A deepening economic crisis has all but emptied Pakistan's foreign exchange reserves, leaving it barely enough dollars to cover a month of imports and it is struggling to service sky-high levels of foreign debt.
The IMF team, which leaves Islamabad on Friday, said "considerable progress" had been made after 10 days of talks.
"Virtual discussions will continue in the coming days," the head of the IMF mission Nathan Porter said in a statement.
Although there was no financial lifeboat, both sides tried to paint the meeting positively.
Pakistan's finance minister told a news conference the country had been given a detailed roadmap.
He talked of "painful but necessary" reforms - the IMF wants to see action and commitments from Pakistan before it commits to lending more money.
In January annual inflation soared to over 27%, the highest it's been in Pakistan since 1975, and there are mounting fears for the economy in a pivotal election year.
This week the rupee sank to a historic low of 275 to the dollar, down from 175 a year ago, making it more expensive for Pakistan to buy and pay for things.
The lack of foreign currency is one of the most pressing of Pakistan's problems.
Like many countries, it is suffering as a result of the coronavirus pandemic and Russia's invasion of Ukraine, following which global fuel prices have soared. Pakistan relies heavily on imported fossil fuels and importing food has also become more expensive.
Impact on Kenya
With a near-zero ability to import on the low reserves, Kenya's tea exports are expected to continue feeling the heat, since Pakistan have been the biggest buyer.
At the weekly tea auction in Mombasa, Pakistan Buyers account for up 40 per cent of the total weekly sales.
Latest market trends however indicate inquiries by Pakistan buyers have been on the drop.
Pakistan's Central Bank last week said its foreign exchange reserves had hit 10-year low after dropping by 16.1 per cent to $3.09 billion (Sh386.2 billion).
According to financial analysts, reserves held by the State Bank of Pakistan would cover just about three weeks of imports, having dropped by $592 million (Sh74 billion) due to external debt payments.
Egypt, the second export destination for Kenyan tea is also battling high inflation.
According to Trading Economics, annual urban inflation rate in Egypt accelerated to 21.3 per cent in December of 2022, from 18.7 per cent in the previous month, and above market expectations of 20.9 per cent.
It was the highest reading since December of 2017, staying well above the upper limit of the central bank’s five to none per cent target range for the tenth consecutive month.
Egypt takes about 18 per cent of Kenya teas sold weekly at the Mombasa auction.
Other key buyers are UK (9%), UAE, Russia and Sudan each five percent, Yemen (3%) while Afghanistan and Poland each take up two per cent share of the exports.
Iran is at the lower end with one per cent with the rest of the world taking up the remaining.
"It is not a secret, we are having that problem of forex reserves by key importers of our commodities,” Investments, Trade and Industry CS Moses Kuria told the Star.
According to the CS, there is need to push for more intra-Africa trade and the use of local currencies under the African Continental Free Trade Area.
Tea, Kenya's leading export is estimated to have earned the country $1.2 billion (Sh149.6 billion) in 2022, followed closely by horticulture at $900 million (Sh112.2 billion) and coffee $301 million (Sh37.6 billion).
In 2021, the commodity accounted for 19.6 per cent of the total domestic exports, valued at Sh130.9 billion, the second highest export earner after domestic exports of horticultural products which were valued at Sh165.7 billion-Economic Survey 2022.
This was up from Sh130.3 billion the previous year.
Remittances were however the single largest forex earner at Sh502.2 billion last year.
The high cost of living and low reserves in key markets has hence seen tea prices at Mombasa remain low in the first month of this year on reduced demand, compared to the same period last year.
The commodity opened the year at an average $2.25 (Sh281.03) before dropping to $2.23 (Sh278.53) and a further drop to $2.03 (Sh 253.55) last week, as almost 50 per cent of packages remained unsold.