Domestic Economy

Kenya’s Q1 Earnings From Tea Exports to Iran Jump Eightfold

Kenya’s Q1 Earnings From Tea  Exports to Iran Jump Eightfold
Kenya’s Q1 Earnings From Tea  Exports to Iran Jump Eightfold

Kenya’s earnings from tea exports to Iran jumped eightfold in the first quarter of 2023, partly soothing the impact of lower sales of the beverage to the West Asian country’s neighbor Pakistan.
Kenya exports about 50% 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 14 billion shilling during the quarter, down from KES16.9 billion in the same quarter in 2022, Nation.Africa reported. 
Nairobi sold tea worth KES4 billion (about $28.36 million) to Tehran between January and March, which is an eightfold increase from sales amounting to KES498.8 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 KES53 billion in the first quarter of 2022 to KES58.2 billion in the first quarter of 2023, translating to a 9.8% growth, said KNBS. 
“Specially, there was a remarkable improvement in exports to Iran from KES498.8 million in the first quarter of 2022 to KES4 billion in the corresponding quarter of 2023, 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 80 million people with a per capita consumption of 1.4 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 KES39.5 billion in the first quarter of 2022 to KES43.3 billion in 2023, 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 KES290.4 per kilogram in the first quarter of 2022 to KES299.7 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 40 to 50 tons of sheep and meat per day with an estimated export value of $6 million [KES846 million] per month. Further, we agreed on Kenya exporting 10,000 tons of onions to Iran, in addition to tea, ” said Mutua in a statement.

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