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Fruits and tea exports from Kenya on the rise as trade volumes shrink by 3pc

NEWS
By Lee Mwiti | November 23rd 2016

Fruits and tea are emerging as money-spinning commodities in Kenya’s export market. This is according to a new report by Maersk Group, a global transport and logistics firm, titled the Maersk Group Trade Report 2016.

The report for example states export volumes of avocados from Kenya to Europe and the Middle East in the first three quarters of 2016 grew by 34 per cent.

“The inception of controlled atmosphere containers has created a fundamental change. Before the new technologies were available, the Middle East region had been as far as fruit exporters could reach in containers,” the report read in part.

“Now, Europe, where a fruit like avocado sells for roughly triple the price, is within reach. And therefore the rise in export volumes,” the report indicates.

The report also asserts that today, Kenya produces an estimated 115,000 metric tonnes of avocado annually, 70 per cent of which is grown by small-scale farmers. Some years back, most of the avocados were sold in the local markets, but this trend has drastically changed this year, where three quarters of the avocado fruit grown is for export.

Tea, which is the second largest foreign exchange earner for Kenya, also recorded significant growth in the export market. Kenyan tea earnings jumped 29 per cent from May 2015 to May 2016. Official data shows  tea fetched Sh53.2 billion in the period under review, up from Sh41.2 billion in a similar period in 2014 – a growth of Sh12 billion.

“Tea earnings’ growth was further aided by the weakening of the shilling against the US dollar,” the report says. “Tea exports grew by 43 per cent in the first nine months of 2016, making it one of the top export commodities from the East Africa region,” it adds.

The report further indicates East Africa’s containerised trade volumes went down by three per cent in the first three quarters of 2016.

The Northern Trade Corridor, which comprises Kenya, Uganda South Sudan and parts of Rwanda grew by two per cent.
On the other hand, the Central Trade Corridor which comprises Tanzania, other parts of Rwanda, Burundi, DR Congo and Zambia, shrank by nine per cent.

The shrinking in trade volumes was as a result of political instability in countries like Burundi and DR Congo, and the region generally running into macro-economic headwinds. Another core reason is the slowdown in commodity demand in China.

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