Kenyan tea farmers are set to earn more from the export of tea to Pakistan after the South Asian nation declared the commodity an essential import.
The country exports about 50% of its tea to Pakistan, making it the world's largest importer of Kenyan tea.
Pakistan’s Ministry of Commerce confirmed in a letter that tea will also be included in the State Bank of Pakistan’s Exchange Policy Department via amendment.
“In view of the above, it is requested that necessary instructions may be issued to the banks for opening LC’s of the tea on priority as this is part of essential imports in the food category,” said Qamar Zaman, Pakistan’s Director General, Agro in a letter to Governor of the country’s state bank.
The decision comes after the Pakistan Tea Association informed the government that domestic demand for tea will increase substantially across the country during the upcoming month of Ramadan.
Kenya’s Agriculture Cabinet Secretary Mithika Linturi welcomed the move by Islamabad, saying the move will make it possible for traders to manage dollar shortage.
“I am happy to announce that our request to have Tea considered as an essential commodity has been approved,” he said
“It comes in as great news with the Pakistan market, being the largest for Kenyan tea at over 45%. This will indeed increase foreign exchange and raise the volumes of Kenyan tea to the Islamic Republic of Pakistan.”
Kenya Tea Development Agency (KTDA) Managing Director Wilson Muthaura hailed the new policy by the Pakistan government.
“The new policy will increase volumes of Kenyan tea export to Pakistan and increase our foreign exchange leading to more earnings for our farmers,” Muthaura said.
The tea industry is one of Kenya’s leading foreign exchange earners, accounting for 26% of the foreign exchange earnings and 2% of the GDP.