Kenyan traders are facing significant challenges amidst civil unrest in Sudan, leading to a steep decline in exports to the country. According to recent data from the Kenya National Bureau of Statistics (KNBS), exports to Sudan plummeted by 73.7% year-on-year up to March 2024. The value of exports dropped to Sh630 million from Sh2.4 billion during the same period last year.
Sudan is a crucial market for Kenyan exports, particularly for tea, and typically ranks among the top 10 buyers. However, ongoing conflicts and attacks on cargo ships along the Suez Canal are exacerbating the situation. Traders at the Mombasa auction report that ships now have to take longer routes to avoid threats from Houthi missiles along the channel, increasing shipping costs significantly.
Year-to-date, the cost of transporting a 40-foot container has surged by about 133%, with the price for shipping tea to Khartoum reaching $3,500 (Sh450,100) as of March, up from $1,500 (Sh193,000) before the Israeli-Gaza conflict.
Beyond Sudan, the KNBS report highlights declines in exports to other markets during the review period, including South Africa and Somalia, which saw decreases of 9.3% and 2.6% respectively.
Despite these challenges, Africa remains the largest market for Kenya’s exports, accounting for 38.3% of total export earnings in Q1 2024. Notably, exports to Egypt, the Democratic Republic of Congo (DRC), Tanzania, Uganda, and South Sudan have seen increases, driven by various commodities including tea, wheat flour, household appliances, and re-exports of kerosene-type jet fuel.
The DRC emerged as the fastest-growing export market for Kenya in the period, with a remarkable 56.0% increase amounting to Sh8.62 billion in Q1 2024. This growth is attributed in part to reduced import duties on wheat implemented last year, marking the highest year-on-year growth in over a decade.
