Ukraine War Slashes Kenyan Tea Exports To Russia By Ksh 1 Billion

By Getrude Mathayo / Published March 29, 2023 | 12:07 pm

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Consumers in Russia faced hard economic times as a result of economic sanctions, hurting demand for Kenyan tea amid the disruption of logistics. Selling to Russia also became harder as the country fell under restrictions in terms of accessing US dollars.

Kenya is one of the world’s largest tea exporters, and Russia is a significant market for Kenyan tea. The Russian-Ukraine war has cut the value of tea exports to Moscow by 1.1 billion shillings, highlighting the effects of the chaos on Kenyan farmers.

This decline could have a negative impact on the country’s economy. The data from the Tea Board of Kenya indicates that the value of tea exported to Russia went down from Sh6.2 billion in 2021 to 5.1 shillings billion last year. This was attributed to the war that started in early 2022.

“Lower export volumes were due to fewer imports by Pakistan, Russia, and Egypt owing to challenges of foreign exchange reserves in these markets occasioned by the effects of the Russia-Ukraine crisis on the global economy,” said the TBK.

The recession not only affected the export volume but also resulted in a reduced number of export destinations, especially to emerging new markets.

Imports by Pakistan account for 55 percent of the total export volume. Other key export destinations for Kenyan tea were Egypt, UAE, the UK, Yemen, and Russia. TBK said the top 10 export destinations, the majority of which are traditional markets for Kenyan tea, accounted for 89 percent of export volumes.

“Apart from UAE, Sudan, Poland, and Afghanistan, most of the other traditional markets recorded lower tea imports from Kenya compared to the same period of last year. The decline was also recorded in key emerging markets such as Nigeria, Jordan, China, and the Netherlands.

Russia remained the sixth largest buyer of Kenyan tea, underpinning its importance as a key market for the beverage. Overall earnings from tea grew by Sh2 billion last year, helped by a weaker shilling, increased volumes, and higher prices of the beverage.

It is essential for Kenya to diversify its export markets and explore other potential markets to reduce its reliance on any one market.