KENYA – Slovakia has become the latest new market for Kenya’s tea and coffee after the world’s largest black tea exporter initiated a search for alternative markets for its green leaf to expand beyond its traditional markets, Pakistan and Egypt, which are currently facing economic hardships.

Kenya is set to start direct bulk exports of tea and coffee to Slovakia. The country’s ambassador to Kenya Katarina Leligdonova noted modalities have been put in place and several companies will sign deals with local farmers’ cooperatives to facilitate the direct shipment of the two cash crops.

Recently, Kenya also scouted for a new market for its tea in Pakistan while also pursuing knowledge transfer from Pakistan, especially in the implementation of modern farming technology like drip irrigation, to improve Kenya’s food security.

In the latest ongoing tea auctions, Kenya’s tea worth Sh1.3 billion (US10m) is held at the Port of Karachi as Pakistan struggles with a shortage of dollars that has restricted banks from issuing traders with the Letter of Credit, which is required before offloading.

Traders say at least 200 containers with 4.8 million kilograms of tea are being held at the port, hitting sales back in Kenya and impacting negatively the prices. The Pakistani traders are also unable to purchase more from Kenya as they lack Letters of Credit to issue to the sellers to guarantee the payment.

The withheld tea has also impacted the Pakistani market, with the price of the beverage hitting Rs1,600 (Sh750) per kilo from Rs1,100 (Sh517) a month ago due to limited supply. The Pakistani government has given priority to essential commodities such as foodstuff and medicine to preserve dollars.

Kenya Tea Development Agency (KTDA) chairman David Ichoho said the situation in Pakistan is set to improve in the coming days following talks with China and the World Bank, aimed at bailing the Asian nation out of the current financial woes.

Pakistan chairman of Tea Association (PTA) Zeeshan Paracha, is quoted by the local media saying that prices would further go up if consignments stuck at the port are not released.

“PTA associations are facing problems in the clearance of documents due to dollar shortage in banks, resulting in holding the containers full of tea leaves at the port for the time being,” a media outlet in Pakistan quoted the official.

According to Pakistan’s tea association, the country has imported almost 234 million kg of tea from Kenya in the last year, while the importers have also paid Rs65 billion in revenue to the government.

Last year, Kenya’s earnings from tea exports increased despite a drop in volumes, as its currency weakened against the US dollar and prices of the commodity improved.

Bloomberg, citing the Tea Board of Kenya, said the country reported an increase in shipments of 1.5% to 138 billion shillings (US$1.07 billion) last year.

The average price of the leaves at Kenya’s auction jumped 18.6% to US$2.49 per kilogram last year. Additionally, the weakening of the Kenyan shilling by about 9.1% against the US dollar in the period helped the nation’s key export generate more foreign currency.

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