Horticulture tops in forex earnings

Earnings from flowers, vegetables and fruits, exported mostly to European countries last year surpassed tea to become Kenya’s second leading foreign exchange earner.

Diaspora remittances, however, topped the key export sectors, with Kenyans sending home Sh289.5 billion.

While both sectors - horticulture and tea registered a decline in revenues, the segmentation of horticulture was able to save it from a major drop.

Earnings from fruits grew while vegetables stayed flat, offsetting a decline in revenues from cut flowers. The sector earnings declined to Sh122.9 billion in 2019 from Sh124 billion in 2018.

Earnings from tea exports were however marked by a bigger drop to Sh113.5 billion last year,  from Sh138 billion in 2018, according to the Kenya National Bureau of Statistics (KNBS.

This was the lowest since 2014 when earnings were at Sh93 billion.

Revenues from tea exports peaked in 2017 at Sh147 billion before dropping in the recent past, owing to a combination of factors, key among them a reduction in the price of tea.

KNBS in the Economic Survey 2020 said the decline in value of tea, coffee and horticulture exports resulted in the overall decline of domestic exports, which came down four per cent to Sh520 billion. In 2018, the value of Kenya’s domestic exports stood at Sh542 billion.

“Earnings from domestic exports reduced by 4.1 per cent to 520.8 billion in 2019, as a result of declines in the value of tea, unroasted coffee and horticultural exports,” said the KNBS report.

“The value of tea exports declined by 18.2 per cent from Sh138.8 billion in 2018 to Sh113.6 billion in 2019 while the value of horticulture exports declined by 1.1 per cent to Sh122.9 billion.”

Horticulture had posted huge growth in 2018, with flowers, for instance, growing 37 per cent compared to 2017. Last year, however, saw reduced demand for Kenyan produce among major European markets.

Tea was last year affected by increased global production as well as turmoil in key markets - Pakistan and the UK.

This led to reduced prices at the auction with a kilo going for Sh225 in 2019 compared to Sh260 a kilo in 2018.

Tourism remained the top forex earner, earning the country Sh163.6 billion in 2019, from Sh157.4 billion in 2018.