Dollar Shortage in Key Markets Challenging Kenya’s Tea Export

Kenyan tea traders are facing challenges in getting payment for their produce in key markets such as Egypt due to a shortage of US dollars in the North African nation, a government official said on Wednesday.

Moses Kuria, the Cabinet Secretary for Investments, Trade, and Industry, claimed that the scarcity has made it more difficult for Egyptian consumers to pay for the product that is driving up demand.

“The produce is there, but there are no ways for payment,” he said during an ICT (information and communications technology) summit in the coastal town of Kwale.

The problem arose a few weeks after tea from Kenya became stuck at Pakistan’s port of Karachi due to the Asian country’s dollar scarcity.

Kenyan tea is one of Pakistan’s essential commodities, and the use of dollars as the transaction currency in the tea business has been approved by the central bank of Pakistan.

Kenya’s top tea export destinations include Egypt and Pakistan, which together account for 55% of all shipments.

According to the Tea Board of Kenya, Kenya’s tea shipments reached USD1.04 billion with 410 million kilos in 2022, up from USD1.02 billion with 388 million kilos in 2021.

The weaker Kenyan shilling was blamed for the increase in earnings.