Business

War in Sudan dents market for Kenyan exporters, slashes exports by 74 per cent

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Sudan is a major export destination for Kenyan tea majorly and typically ranks among the top 10 buyers.

In the face of civil strife in Sudan, Kenyan traders are seemingly keeping off the market for their exports in fear of losses that could stem from the war that began in April last year.

As a result, Kenyan exports to the market have declined by 73.7 per cent in one year up to March 2024.

The latest data by the Kenya National Bureau of Statistics (KNBS) shows the value of exports stood at Sh630 million in March 2024, compared to Sh2.4 billion recorded in the same period last year.

Sudan is a major export destination for Kenyan tea majorly and typically ranks among the top 10 buyers.

The ongoing attacks on cargo ships along the Suez Canal have also been noted by traders at the Mombasa auction to be affecting export trade between the two nations. They said ships now have to navigate longer routes to evade Houthi missile threats along the channel.

Year-to-date, the shift has led to a substantial surge in shipping costs, with the expense of transporting a 40-foot container escalating by about 133 per cent.

According to the tea traders, the price for a container of tea bound for Khartoum had risen to $3,500 (Sh450,100) as of March this year, compared to the pre-Israeli-Gaza conflict rate of $1,500 (Sh193,000).

Yemen's Houthis have actively targeted commercial vessels in the Red Sea, expressing support for Palestine in its conflict with Israel.

Apart from Sudan, the KNBS report notes other markets that recorded a decline in exports from Kenya, in the review period. These are South Africa and Somalia, whose export values declined by 9.3 and 2.6 per cent, respectively.

Generally, Africa remained the largest market for Kenya's exports accounting for 38.3 per cent of total export earnings in Q1 this year.

The total value of Sh113.9 billion, was mainly supported by an increase in exports to Egypt (45.7 per cent), the Democratic Republic of Congo (56.0 per cent), Tanzania (18.0 per cent), Uganda (7.4 per cent) and South Sudan (25.7 per cent).

"There was increased domestic exports of tea to Egypt; wheat flour to Democratic Republic of Congo; carboys, bottles, flasks and similar articles to Uganda; household or laundry-type washing machines to South Sudan; and re-exports of kerosene-type jet fuel to Tanzania," the report reads.

Notably, the DRC emerged as the fastest-growing export market for Kenya in the period under review, overtaking Uganda and Tanzania. Exports to the nation surged by 56.04 per cent to Sh8.62 billion in the first quarter of 2024, the highest year-on-year growth in over a decade.

This significant increase is attributed to the reduced import duty on wheat from 35 to 10 per cent, implemented in July last year.

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