China emerges as potential key market for Kenya’s black tea

Image by Umehanayuuki from pixabay

KENYA – Kenya is working on reducing the huge trade deficit with China by securing more market for its exports in the East Asian country, mainly of agricultural products.

The target will be achievable riding on the Integrated National Export Development and Promotion Strategy, an export diversification plan unveiled in July 2018.

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According to reports by The Star, trade between the two nations is currently in favour of China with Kenyan imports valued at approximately Sh390 billion (US$3.5 billion) annually, against exports of around Sh11 billion. (US$10 million) A ratio of 35:1.

To this end Kenya has set sights on opening up a distribution centre in China’s Wuyishan region, where some of the world’s most expensive teas are grown, in the wake of falling demand for Kenyan tea in the Asian economy.

The value of Kenyan tea exports to China fell by more than a third last year despite rising popularity of milk tea which has increased demand for black tea leaves, reports Business Daily.

Kenya earned US$3.17 million (Sh343.59 million) from sale of black fermented and partly fermented tea to the world’s largest tea market in 2019.

This was a 34.05% drop compared with the earlier year, the data kept by International Trade Centre (ITC) show.

This marked the first drop since 2016 when Kenya’s shipments amounted to US$1.77 million (Sh191.85 million), before climbing to US$2.5 million (Sh270.97 million) in 2017 and US$4.81 million (Sh521.35 million) in 2018, statistics from the joint agency of the World Trade Organization and the United Nations further indicate.

The Kenya Export Promotion and Branding Agency (Keproba), says it’s looking at “a dedicated Centre for Kenya in Wuyi” as part of strategy to help small- and medium-sized enterprises “get their footings in the vast Chinese market”.

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China is the largest tea producer and exporter in the world but mostly produces, consumes and exports green tea compared to Black tea.

But recently the country has shifted focus to black tea on the back of increasing consumption of creamy (milk) tea blends which the country’s predominantly green tea cannot do.

This has increased its importation of black tea in recent years with the country importing approximately 36,400 metric tons of black tea in 2019 with the exports amounting to just slightly less 35,000 metric tons that year.

China is not among Kenya’s top 10 tea destinations, dominated by Pakistan, Egypt, the UK, Sudan and Russia, but is seen as an emerging market with the biggest potential for expansion.

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