Kenya’s tea is feeling the hit of global recession as top buyers cut on volumes on the back of the Russia-Ukraine war, pushing down the export of one of the country’s top foreign earners by 17 percent in five months to May.
Sector regulator- the Tea Board of Kenya (TBK) says the volume of tea purchased at the auction declined to 211 million kilogrammes from 251 kilos in the corresponding period last year.
The top six buyers, who are grappling with a sluggish economy, currency shortage and civil war, recorded a huge decline in purchases, shedding a total of 31 million kilos in the review period.
“The decline in export volume was majorly due to the effects of the Russian-Ukraine crisis that continued to cause global recession thus affecting purchasing power of most markets,” said TBK.
Pakistan- Kenya’s top buyer of the beverage and which accounted for 38 percent of the total tea that was exported in five months to May, lost 12 percent of the volumes that were shipped in the corresponding period a year earlier
Pakistan has been grappling with a shortage of dollars and at one point suspended the imports of non-essential goods, tea being one of them, in order to preserve money in the country.
Egypt, the second largest buyer of Kenya’s tea recorded a 17 percent decline in the review period. The country has also been struggling with a shortage of dollars and a weaker pound that had to be devalued at some point.
The weakening pound in Egypt has impacted consumers’ purchasing power negatively as it fuels inflationary pressure in an economy where 60 percent of the population lives below the poverty line.
A July poll by Reuters indicates Egypt’s economic growth is expected to be slower than forecast earlier, while inflation would stay higher and the Egyptian pound would weaken a little more than previous projections.
Last year, Pakistan imported 234 million kilogrammes of tea with Kenya supplying 191 million kilos equivalent to about 82 percent of the total imports by Islamabad, according to the regulator.
United Kingdom, UAE, Russia and Sudan saw their volumes decline by 32, 18, 15 and seven percent respectively.
Pakistan and Egypt account for 55 percent of the total tea exports from Kenya.
The TBK has been seeking new markets for Kenyan tea as it moves to diversify buyers for the beverage and cut overreliance on the top countries which account for 85 percent of the total volumes that are exported