Kenya’s Q۱ Earnings From Tea Exports to Iran Jump Eightfold

EghtesadOnline: Kenya’s earnings from tea exports to Iran jumped eightfold in the first quarter of ۲۰۲۳, partly soothing the impact of lower sales of the beverage to the West Asian country’s neighbor Pakistan.

News ID: ۷۵۲۶۹۰

10 July 2023

Kenya’s earnings from tea exports to Iran jumped eightfold in the first quarter of ۲۰۲۳, partly soothing the impact of lower sales of the beverage to the West Asian country’s neighbor Pakistan.

Kenya exports about ۵۰% of its tea to Karachi but lower demand from tea buyers in that country saw Kenya’s earnings from tea sales to Pakistan drop to ۱۴ billion shilling during the quarter, down from KES۱۶.۹ billion in the same quarter in ۲۰۲۲, Nation.Africa reported.

Nairobi sold tea worth KES۴ billion (about $۲۸.۳۶ million) to Tehran between January and March, which is an eightfold increase from sales amounting to KES۴۹۸.۸ million in the same quarter of last year, according to fresh data from the Kenya National Bureau of Statistics.

This partly helped boost earnings from all exports to Asia, which increased from KES۵۳ billion in the first quarter of ۲۰۲۲ to KES۵۸.۲ billion in the first quarter of ۲۰۲۳, translating to a ۹.۸% growth, said KNBS.

“Specially, there was a remarkable improvement in exports to Iran from KES۴۹۸.۸ million in the first quarter of ۲۰۲۲ to KES۴ billion in the corresponding quarter of ۲۰۲۳, largely driven by increased domestic exports of tea,” said the KNBS.

Kenya has been relying on the top traditional markets of Pakistan, the UK, Sudan, Egypt, Russia and others to sell its tea but has been scouting for new markets to boost sales.

Some of the countries that have increased tea imports from Kenya in recent years include the US, Ireland, Finland and Ukraine at a time when the country is in an even greater need for foreign exchange earnings.

Kenya has been targeting Iran as one of the major buyers and has been promoting sales in Tehran.

According to the Agriculture and Food Authority, Iran has a population of more than ۸۰ million people with a per capita consumption of ۱.۴ kilograms against Kenya’s half a kilogram, creating a huge potential market for the country’s produce.

Overall, revenue from domestic exports of tea went up from KES۳۹.۵ billion in the first quarter of ۲۰۲۲ to KES۴۳.۳ billion in ۲۰۲۳, which helped shore up the country’s forex reserves that have in recent months consistently fallen below the legal threshold of at least four months of import cover.

“This growth was a result of an increase in exported quantities buoyed by better tea prices in the international markets, which increased from KES۲۹۰.۴ per kilogram in the first quarter of ۲۰۲۲ to KES۲۹۹.۷ per kilogram in the quarter under review,” said the KNBS.

Increased consumption of Kenyan tea in Iran comes at a time the two countries are seeking to boost their trade ties even as they eye trade of more commodities between Nairobi and Tehran.

Early this year, Kenya agreed to increase exports of sheep, meat and onions to Iran after Foreign Affairs Cabinet Secretary Alfred Mutua met with the Iranian Ambassador to Kenya Jafar Barmaki.

“On trade, it was agreed that Kenya will export ۴۰ to ۵۰ tons of sheep and meat per day with an estimated export value of $۶ million [KES۸۴۶ million] per month. Further, we agreed on Kenya exporting ۱۰,۰۰۰ tons of onions to Iran, in addition to tea, ” said Mutua in a statement.