Eliud Miring'uh
23 February 2005
Nairobi — The Kenyan tea industry continued to suffer huge losses yesterday following the boycott of the Mombasa tea auctions by Pakistani traders.
Industry sources described as "sluggish" the participation of Pakistan on the trading floor.
Last week a total of 20,140 packages of black tea (1,290,000 kilograms) worth $1.94 million (Sh150 million) were withdrawn from the market after Pakistan boycotted the auction.
This is the second week since Islamabad took the unprecedented action in retaliation against Kenya's decision to increase tariffs on imported Pakistani rice.
Trade relations between Pakistan and Kenya soured last month following the coming into effect of the East African Customs Union. Tariff on imported rice has risen from 35 per cent to 75 per cent in line with the Common External Tariffs (CET) governing the East African Customs Union.
The uniform external tariff to be levied by all EAC members came into effect on January 1, 2005. Statistics indicate that Pakistan has been exporting Sh2.3 billion worth of rice to Kenya annually for the past five years.
Pakistan is the largest consumer of Kenyan tea accounting for over 24 per cent of total sales worth Sh12 billion. Kenya Tea Development Agency products account for over 60 per cent of the total. Other major importers of Kenyan tea are Egypt, the United Kingdom, the Sudan and Afghanistan. Introduction of enhanced tariff charges on imported rice has infuriated the Pakistanis leading to calls for retaliatory measures against Kenya.
Over 200 containers of Pakistani rice are currently lying at the Mombasa Port as Pakistani businessmen await the Kenya Government's decision on the matter.
The action by Pakistan has sent shivers down the spines of key stakeholders in the tea industry who are now putting pressure on the Government to act. "Unless immediate steps are taken to address the problem, the smallholder tea sub-sector will suffer serious consequences," said KTDA managing director, Lerionka Tiampati.
KTDA and Tea Board of Kenya officials spent a whole day last week lobbying the Government to scrap the new tariffs in order to ease the stand off.
Be the first to Write a Comment!
Copyright © 2005 The East African Standard. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
