Kenya’s earnings from tea exports to Iran jumped eight times in the first quarter of 2023, partly soothing the impact of lower sales of the beverage to the Asian country’s neighbour Pakistan.
Kenya exports about 50 per cent 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 Sh14 billion during the quarter, down from Sh16.9 billion in the same quarter in 2022.
Kenya, however, ramped up sales of the beverage to Iran during the period, which partly helped reduce the blow from lower tea sales to Pakistan.
Nairobi sold tea worth Sh4 billion to Tehran between January and March, which is an eightfold increase from sales amounting to Sh498.8 million in the same quarter last year, according to fresh data from the Kenya National Bureau of Statistics (KNBS).
This partly helped to boost earnings from all exports to Asia which increased from Sh53 billion in the first quarter of 2022 to Sh58.2 billion in the first quarter of 2023, translating to a 9.8 per cent growth, said KNBS.
“Specifically, there was a remarkable improvement in exports to Iran from Sh498.8 million in the first quarter of 2022 to Sh4 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 the country is in an even greater need for foreign exchange earnings.
According to the Agriculture and Food Authority, Iran has a larger population of more than 80 million people with a per capita consumption of 1.4 kilogrammes against Kenya’s half a kilogramme, creating a huge potential market for the country’s produce.
Overall, revenue from domestic exports of tea went up from Sh39.5 billion in the first quarter of 2022 to Sh43.3 billion in 2023, which helped shore up the country’s forex reserves which 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 Sh290.4 per kilogramme in the first quarter of 2022 to Sh299.7 per kilogramme 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 Dr Jafar Barmaki.
“On trade, it was agreed that Kenya will export 40 to 50 tonnes of sheep and meat per day with an estimated export value of $6 million (Sh846 million) per month. Further, we agreed on Kenya exporting 10,000 tonnes of onions to Iran in addition to tea,” said Dr Mutua in a statement.
