Kenya may benefit from the current stand-off between India and Pakistan in increasing its exports of tea to Pakistan. India accounts for 16 percent of tea supplies to Pakistan.
Edward Mudibo, Managing Director of the.East Africa Tea Traders Association (Eatta) said“We would like to use this impasse to further our tea exports to Pakistan as Kenya stands to benefit from this standoff.” In January 2018, Kenya almost lost the Pakistan market due to concerns expressed by Pakistan over possible contamination of aflatoxin in the commodity. Subsequently, Kenyan Tea had to undergo rigorous tests that created a backlog on consignment for Pakistan.
Analysts point out that though Kenya may gain in terms of export volumes to Pakistan, the earnings could be lower due to the devaluation of the Pakistani rupee against the dollar. The Pakistani rupee has been losing value for the past year.
Kenyan tea exports have been struggling due to global trends such as fall in global oil prices and currency devaluation of countries that are major importers of the Kenyan tea leading to a sharp drop in demand. Oil economies such as Egypt and Sudan, which are major buyers of Kenyan tea have persistently cut down their purchases. In the last financial year, 84 percent of Pakistan’s total tea imports came from Kenya.
Pakistan, Egypt, the UK, Sudan, and the United Arab Emirates have been the major markets for Kenyan tea. However, there has been a steady fall in the volumes purchased by these countries.
