Kenya is working on more openings for its tea exports in the Iranian market despite trade financing challenges facing the Asian country in the wake of biting Western sanctions.

 

The Tea Board of Kenya said Iran remained a high potential growth market for exports and urged traders to cautiously exploit opportunities in that country.

 

"Iran is an important future market for Kenya tea with a growth potential once the issues confronting the country are resolved," managing director Sicily Kariuki said.

 

Kenya exported some five million kilograms of tea to Iran last year, according to statistics by the regulator.

 

Iran is reportedly seeking to close grain purchases using gold and oil as payment, and has also paid in yen for a large volume of wheat in its first deal since the Western sanctions began. Indian tea exporters to Iran last week reported that they were already facing payment hurdles owing to the sanctions.

 

Payment problems have also seen Malaysia halting palm oil exports to Iran.

 

The board said a prolonged trade financing crisis in Iran could have an impact on tea exports but vowed to keep the market it its radar of key growth outlets.

 

"As has been raised by India, Kenyan traders will most likely be impacted by the current circumstances caused by tight sanctions," Mrs Kariuki said.

 

"Given the market's potential and the fact that the industry, including TBK have made efforts to gain entry in this market, would hope for a quick resolution to the current situation, so that market development efforts can resume" she said.

 

 

Officials and traders in Kenya, however, said the impact of Iran's woes was yet to reflect locally.

 

"We have not received any active indications of the impact, largely because only a handful of Kenyan exporters have been active in this market. And even these, have been very cautious and have been watching the market very closely," Mrs Kariuki said.

 

Kenya has been trying to diversify its markets to cut reliance on the top markets of UK, Egypt, Sudan, Afghanistan and Pakistan, which account for 70 per cent of total exports.

 

Kenya produced less tea last year from the previous period due to adverse weather but earnings from the crop soared to Sh109 billion, thanks to high prices and a weaker local currency against the dollar.

 

The country produced 377 million kilogrammes of tea last year, down five per cent from 399 million in the previous period, when it had earned Sh97 billion from the cash crop in 2010.
 

(Source:  allafrica)