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In a report sent to Capital FM Business, the Tea Board of Kenya says the market has somewhat slowed down/FILE


Egypt crisis affects Kenya’s tea exports

In a report sent to Capital FM Business, the Tea Board of Kenya says the market has somewhat slowed down/FILE

In a report sent to Capital FM Business, the Tea Board of Kenya says the market has somewhat slowed down/FILE

NAIROBI, Kenya, Jul 15 – Tea exporters are now seeking other markets in bid to save the loss experienced as the crisis in Egypt negatively affects the industry.

Sasini Tea Chief Executive officer Caesar Mwangi says that the country is losing about 340 million a week due to the uprising in Egypt – which is Kenya’s main export market.

“Last week’s auction there were nil orders from Egypt. Warehouses are full of unsold tea and Egypt being our main export something needs to be done,” Mwangi said.

He said that exporters are seeking other new markets and increasing demand in China, Pakistan, Sudan, Somalia and the European region.

“The Tea Board of Kenya is really marketing our tea in these places to maximise their full potential in the hope of saving the 20 percent export loss,” he said.

Egyptians took to the streets two weeks ago demanding for Mohamed Morsi’s resignation blaming him for letting the economy fall.

Egypt is now faced with high unemployment, soaring inflation, decreased tourism and chronic fuel shortages.

In a report sent to Capital FM Business, the Tea Board of Kenya says the market has somewhat slowed down.

The report says there are indications that banks in Egypt have difficulties in operating and there is limited commercial activity visible as demonstrations continue.

“Tea buyers in Egypt are not making any orders as they cannot smoothly transact more so difficulties in the facilitation of letters of credit,” the report said.

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Also, there is possibility of buyers being cautious and making minimal buying.

“We are keenly monitoring the situation with a view to ascertaining the real impact. Egypt remains a leading market for Kenya tea and it is our hope that the situation will normalize,” the report stated.

The board said that the tea industry is expected to depend on markets in countries like Sudan, Pakistan and European Region.

“There is an emerging demand of our tea in Middle East and the Soviet Countries,” the report indicated.

Tea Brokers East Africa reported sales volume declined to 4.5 million kilograms last week from 5.3 million kilograms the week before.

The average price for Kenyan tea fell 4.4 percent to $2.41 per kilogram (Sh209) at an auction last week from the previous sale the week before.

Last year Tea generated about $1.2 billion (Sh104 billion) according to Central Bank of Kenya.

Tea is central to Kenya’s economy; tea exports represent 26 percent of total export earnings and about 4 percent of Gross Domestic Product.

More to that the exporters are also seeking for low operational costs,

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“Operational costs in the sector needs to be looked at, we need good roads, and affordable power costs so as to be competitive in the market,” Mwangi said.

He however supported the construction of railway line that was see transport cost subside.

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