Posted on October, 11, 2023 at 09:48 am
According to official figures released on Thursday, spending on imports from Russia and Ukraine surged by over four times in the first half of the year. This growth was primarily caused by a spike in orders for wheat and maize grains.
According to data released by the Kenya National Bureau of Statistics (KNBS), Kenyan traders spent a record-high of about Sh50.97 billion on items from both rival Eastern European neighbors.
That was an increase of 369.98% over Sh10.84 billion in the same time frame the previous year, when the Russia-Ukraine conflict, which began in February 2022, had reached its climax and major commercial lines had been cut off.
“There was an increase in imports of wheat from the Russian Federation; and wheat and maize from Ukraine, driving the import bill from these two sources,” KNBS analysts stated in the Balance of Payments report for the second quarter of the year.
Imports from Russia were Sh43.30 billion in the first half of the year, up from Sh8.72 billion the previous year, while imports from Ukraine totaled Sh7.66 billion, up from Sh2.12 billion.
The one-year deal that permitted exports to leave the war-torn nation through a secure route across the Black Sea was notably beneficial for grain shipments from Ukraine.
The Black Sea Grain Initiative was created in July 2022 in Istanbul, Turkey, as a result of a deal between Turkey, Russia, and the UN that opened the door for the resumed shipment of grains through that route.
For wheat supply, Kenya heavily depends on the two nations, particularly Ukraine. The product is used to bake foods like bread, chapati, and cakes that are consumed every day by the majority of families. Last year, the ongoing conflict in Ukraine had a negative impact on the world's supply of wheat, which resulted in skyrocketing worldwide prices.
Due to the conflict in Ukraine earlier in the year, which was worsened by export restrictions in India, Kenya, whose production was severely impacted by drought, saw record prices for the commodity. That led Kenya to successfully request permission from the Council of Ministers of the East African Community to import wheat for a year starting in July with a 10% levy instead of the customary 35% for the bloc.
According to Njuguna Ndung'u, Treasury Cabinet Secretary, the lower tariffs will "ensure that there is enough wheat to meet local demand, while at the same time protecting wheat farmers from unfair competition from imported wheat."
Source: Business Insider