Nairobi, Kenya – Kenya’s earnings from tea exports to Iran have experienced a remarkable eightfold increase in the first quarter of 2023, providing a welcome boost amidst lower sales to neighboring Pakistan. While Kenya traditionally exports approximately 50% of its tea to Karachi, reduced demand from Pakistani buyers led to a drop in earnings from tea sales to Pakistan. However, the surge in exports to Iran has helped offset this decline.
According to fresh data from the Kenya National Bureau of Statistics (KNBS), Nairobi sold tea worth KES4 billion (about $28.36 million) to Tehran between January and March, a significant jump from sales amounting to KES 498.8 million in the same quarter of the previous year. This surge in tea exports to Iran played a crucial role in driving overall earnings from exports to Asia, which grew by 9.8% from KES 53 billion in the first quarter of 2022 to KES 58.2 billion in the first quarter of 2023.
The KNBS noted that the increase in exports to Iran was largely driven by higher domestic exports of tea. Kenya, known for its reliance on traditional tea markets such as Pakistan, the UK, Sudan, Egypt, and Russia, has been actively seeking new markets to bolster its tea sales. In recent years, countries like the US, Ireland, Finland, and Ukraine have shown increased interest in importing Kenyan tea, providing opportunities for the country to diversify its export destinations and generate foreign exchange earnings.
Iran presents a significant market potential for Kenya due to its population of over 80 million people and per capita tea consumption of 1.4 kilograms, which surpasses Kenya’s half a kilogram. Recognizing this potential, Kenya has been actively promoting tea sales in Tehran and fostering stronger trade ties with Iran.
The surge in tea exports to Iran is not only beneficial for Kenya’s earnings but also comes at a time when both countries are looking to enhance their trade relations. Earlier this year, Kenya and Iran agreed to increase exports of sheep, meat, onions, and tea following discussions between Foreign Affairs Cabinet Secretary Alfred Mutua and the Iranian Ambassador to Kenya Jafar Barmaki. The aim is to tap into the growing demand for various commodities between the two nations and explore further trade opportunities in the larger Asian region.
President William Ruto highlighted the significant increase in tea exports to Iran during Iranian President Ebrahim Raisi’s visit, underscoring the strong export partnership between the two countries. Ruto emphasized the potential for Kenya and Iran to serve as key entry points for each other in their respective regions, paving the way for enhanced collaboration and trade expansion.
The surge in tea exports to Iran not only contributes to Kenya’s foreign exchange earnings but also strengthens the economic ties between the two nations, fostering increased cooperation in various sectors such as agriculture, infrastructure, education, and development.
By: Montel Kamau
Serrari Financial Analyst
13th July, 2023
photo source: Google
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