Economy
Pakistan overtakes US as Kenya’s top exports earner
Thursday October 26 2023
Pakistan is the leading buyer of Kenya’s tea but it also buys leather, coffee, and spices in small quantities.
Pakistan overtook the US and the Netherlands to become the largest destination for Kenya’s goods in the first eight months of the year outside of the East African Community, pointing to increasing orders for tea.
Analysis of Kenya’s export earnings by value shows Pakistan ordered goods worth Sh48.28 billion in the review period, a 19.29 percent bump over Sh40.47 billion in the similar period the year before.
The order book from the South Asian country surpassed the Netherlands which stood at Sh43.94 billion and the US at Sh42.89 billion, according to data published by the Kenya National Bureau of Statistics.
Pakistan is the leading buyer of Kenya’s tea, in addition to small quantities of leather, coffee, and spices.
This came at a time Kenya’s earnings from tea exports grew 13.54 percent in the review period to Sh120.13 billion, the KNBS data shows. The growth was largely helped by a weaker shilling against major international currencies, with data showing volumes of tea exports remained flat.
Kenya shipped out 368,822.03 tonnes of tea in the January-August period, a measly 1.92 percent growth over 361,866.58 tonnes in the corresponding period of last year.
Pakistani buyers of tea were earlier in the year hit by the scarcity of the US dollar, prompting Kenya’s Agriculture Secretary Mithika Linturi to visit Islamabad. The visit resulted in authorities in Pakistan classifying tea as an essential import, helping traders in the commodity to access the dollars on a priority basis.
The data shows that exports to the Netherlands, predominantly cut flowers, grew by a fifth partly on easing inflation in Europe that helped to free up some household cash for expenditure on ornamentals.
The bulk of Kenya’s horticultural produce like cut flowers are sold to the European Union bloc through Amsterdam.
The US, which was the biggest global destination of Kenya’s goods outside the EAC, has this year posted a dip in orders.
The data shows the world’s largest economy bought goods worth Sh42.89 billion in eight months through August, a 17.92 percent fall from Sh52.25 billion the year before.
Jaswinder Bedi, a veteran textiles technologist and manufacturer who chairs the board of Kenya Export Promotion & Branding Agency, attributed the plunge in the value of exports to the US this year to excess stocks of orders last year.
“The drop (in the value of exports) is largely because the inventory levels in the USA are high following excess purchase post Covid-19,” Mr Bedi told the Business Daily in early August.
Total earnings from exports increased 12.63 percent to Sh656.05 billion in the eight months, the data shows.
Most Kenyan traders export produce raw because of higher taxes slapped on semi-processed or processed products in destination markets such as Europe, fearing that value addition will make exports less competitive on the global markets.
→ (email protected)