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Pakistan’s Federal Minister for Planning and Development, Ahsan Iqbal, revealed that the South Asian country has been importing tea on credit, putting pressure on its economy
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The minister urged Pakistanis to avoid all products the country does not produce independently as inflation bites
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According to the Observatory of Economic Complexity (OEC), Kenya was the largest exporter of tea to Islamabad in 2022 as it earned $ 495 million Sh 58.2 billion) in that financial year
Pakistan’s Federal Minister for Planning and Development, Ahsan Iqbal, has asked the country’s citizens to cut their tea consumption over high import bills.
This means Kenya could lose billions in foreign exchange as Pakistan is the largest importer of tea from the Mombasa auction.
Iqbal reveals Pakistan imports tea on credit
Iqbal revealed that the South Asian country has been importing tea on credit, putting pressure on its economy, which faces a high inflation rate.
CNN reported that he urged his fellow citizens to consider reducing their drink intake by one or two cups daily.
“I appeal to the nation to cut down the consumption of tea by one to two cups because we import tea on loan,” the senior government official said.
The minister urged Pakistanis to avoid all products the country does not produce independently. The Observatory of Economic Complexity (OEC) noted that Pakistan was the largest importer of tea in the world in 2020.
It imported tea worth $ 646 million (Sh 75.9 billion). According to OEC, Kenya was the largest exporter of tea to Islamabad as it earned $ 495 million Sh 58.2 billion) in that financial year.
Kenya was followed by Vietnam (KSh 8 billion), Rwanda (Sh 3.3 billion), Uganda (Sh 1.7 billion), and China (Sh 1.1 billion). The OEC also ranked Kenya as the fastest-growing market in tea between 2019 and 2020, followed by Uganda and Bangladesh.
In 2021, Kenya exported tea worth Sh 130.9 billion, according to the 2022 Economic Survey report, which the Kenya National Bureau of Statistics released in May.
The report showed Kenya’s tea production declined by 5.6%, from 569,500 tonnes in 2020 to 537,800 tonnes, attributed to bad weather conditions.
How could future import cuts by Pakistan affect Kenya?
If Pakistan decides to cut imports from Kenya, traders and farmers will suffer as prices would be lowered, according to Edward Mudibo, the managing director at the East African Tea Traders Association (EATTA).
“Any reduction would lead to lower tea prices because of the reduced demand for teas at auction,” Mudibo told Citizen Digital.
Mudibo said EATTA was engaging in talks with the Pakistan Tea Association to avert the looking crisis. He opined Pakistan should explore options other than cutting tea exports as it was a highly sought food item on the menu.
According to its website, EATTA brings together tea producers, buyers (exporters), brokers, tea packers and warehouses from 10 member countries. It runs the tea action at the port of Mombasa.
EATTA, which is composed of 267 members, has exported over half a billion tonnes of tea valued at over Sh 120 billion.
