Global Rice News

Pakistan Surpasses US as Kenya’s Top Export Destination

In a notable shift, Pakistan has overtaken the United States and the Netherlands as Kenya’s largest export destination outside of the East African Community. This surge in trade with Pakistan can be attributed to increasing orders for Kenya’s main export, tea. During the first eight months of the year, Pakistan imported goods worth Sh48.28 billion from Kenya, a significant 19.29% increase compared to the same period last year.

The data, released by the Kenya National Bureau of Statistics, highlights Pakistan’s emergence as a major buyer of Kenyan tea, as well as smaller quantities of leather, coffee, and spices. Kenya’s earnings from tea exports experienced a notable 13.54% growth, reaching Sh120.13 billion during the review period. This growth was largely aided by a weaker shilling against international currencies. Although the volume of tea exports remained relatively stagnant, the favorable exchange rate favored export revenues.

The scarcity of the US dollar earlier in the year had affected Pakistani buyers of Kenyan tea. In response to this challenge, Kenya’s Agriculture Secretary, Mithika Linturi, paid a visit to Islamabad. As a result, tea was classified as an essential import by Pakistani authorities, ensuring that traders were able to access dollars on a priority basis.

Additionally, the data reveals that exports to the Netherlands, particularly cut flowers, experienced a significant increase of 20%. This growth can be attributed to a decrease in inflation in Europe, which freed up household spending power for ornamental purchases. Amsterdam serves as a primary entry point for Kenya’s horticultural produce, particularly cut flowers, which are predominantly sold within the European Union bloc.

Conversely, the United States, once Kenya’s largest export market outside of the East African Community, experienced a decline in orders. The US purchased goods worth Sh42.89 billion during the eight-month period, indicating a significant 17.92% decrease compared to the previous year. Jaswinder Bedi, Chairman of the Kenya Export Promotion & Branding Agency, attributed this decline to high inventory levels of orders from the previous year.

Overall, Kenya’s total export earnings increased by 12.63% to Sh656.05 billion during the first eight months of the year. It should be noted that most Kenyan traders primarily export raw produce, as higher taxes on semi-processed or processed goods in destination markets such as Europe make value-added exports less competitive internationally.

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