This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 11/22/2017

Agriculture dominates the Kenyan economy, accounting for 70 percent of the workforce and about 25 percent of the annual GDP.  The country’s major agricultural exports are tea, coffee, cut-flowers, and vegetables. Kenya is the world’s leading exporter of black tea and cut-flowers.
 
Kenya’s high rainfall areas constitute about ten percent of Kenya’s arable land, and produce 70 percent of national commercial agricultural output. Farmers in semi-arid regions produce about 20 percent of the output while the arid regions account for the remaining ten percent of the output. Productivity remains relatively low in all the regions due to poor incentives, and underdeveloped supporting infrastructure and institutions. Since 2013 Kenya has been undertaking agricultural sector reforms that are expected to spur growth. A new regulatory framework, arising from the consolidation and harmonization of the sectoral laws is under implementation.
 
Although Kenya is perennially faced with supply deficits in most of its food sectors, the country continues to use instruments under the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC) agreements to limit food imports. Both agreements provide for high non-member tariffs on sensitive commodities including meat, dairy poultry, maize, rice, wheat, and beans. Elements of subsidy still exist especially in the seed and fertilizer systems.
 
Corn (Maize)
Corn remains the most important staple food in Kenya and its consumption continues to increase despite calls by Government of Kenya (GOK) for diet diversification. Corn is also a key raw material in animal feeds. Kenya is a corn deficit country, necessitating importation mainly from the East African Community (EAC) countries, with a significant portion of the imports being contributed by informal cross-border trade. Imports from outside the EAC currently attract a steep external ad valorem tariff of fifty percent, unless waived by EAC for a specific period to address dire shortages. Corn imports from the US are currently impeded by the existing import ban on genetically modified (GM) products.

Marketing Year (Jul/Jun)

2014

2015

2016

2017 (E)

2018(F)

Local Production (MMT)

2.80

2.65

2.80

2.50

2.80

Total Imports (MMT)

0.8

0.9

1.0

1.3

1.0

Imports from the U.S. (MMT)

0

0

0

0

0

 

(E) (F) FAS/Nairobi estimates and forecasts, respectively
 
Wheat
Domestic wheat production meets less than a third of the wheat demand creating the need for importation. The increase in wheat demand is fueled by the considerable expansion in home and industrial baking. In addition to the traditional bakeries, most leading supermarkets chains have opened baking units within their stores. The bulk of the wheat imports are from the Black Sea region (Russia, Ukraine and Kazakhstan), Pakistan, Brazil, Argentina, and Australia. Pricing and cost of transportation are a major consideration in wheat import decisions; imports into Kenya by registered millers are charged a 10 percent ad-valorem tariff; otherwise the EAC common external tariff of 35 percent applies. Imports from the US are mainly for food aid programs.

Marketing Year (Jul/Jun)

2015

2016

2017 (E)

2018 (F)

Local Production (TMT)

420

450

380

450

Total Imports (TMT)

1,455

1,590

1,620

1,650

Imports from the U.S. (TMT)

38

57

44

0

 

 (E) (F) FAS/Nairobi estimates and forecasts, respectively
 
Rice, Rough
Rice is the third most important food crop in Kenya after maize and wheat. Local production can barely cope with the increasing demand and importation has been inevitable. Rice imports into Kenya are mainly from Pakistan, Vietnam, Thailand, and India. In 2015, the EAC revised the common external tariff (CET) to seventy five percent ad valorem or $345 per ton, whichever is higher. The EAC has however allowed Kenya, on account of low local and regional production, to continue applying a tariff of 35 percent ad-valorem or $200 per ton, whichever is higher on imports from outside the EAC, a concession that is reviewed every year.

Marketing Year (Oct/Nov)

2014

2015

2016

2017 (E)

2018(F)

Rough Production (TMT)

91

90

136

106

152

Total Imports (TMT)

400

4,200

460

4,700

480

Imports from the U.S. (TMT)

0

0

0

0

0

 

(E) (F) FAS/Nairobi estimates and forecasts, respectively
 
Animal Genetics
Kenyan cattle producers own about 14 million indigenous (Zebu) and over four million dairy cattle. Demand for animal genetics is most vibrant among the more than 650,000 small-scale producers who own 80 percent of the dairy cattle. Due to declining farm sizes and recurrent droughts, Kenya’s dairy producers appear to be opting for breeds such as the Aryshire to Holstein because of their lower feed demands.
 
United States is the largest supplier of bovine genetics in Kenya with a 42 percent market share. Other suppliers of animal genetics to the Kenyan markets include the Netherlands, Canada, Germany and the United Kingdom.

Calendar Year

2014

 

2015

 

2016

 

2017E

2018 (F)

Total Local Production (1,000 straws)

800

 

850

 

900

 

900

920

Total Exports ($1,000)

N/A

 

N/A

 

N/A

 

N/A

N/A

Total Imports($1,000)

762

 

809

 

1,083

 

1,220

1,390

Imports from the U.S. ($1,000)

258

 

209

 

460

 

440

520

 

(E) (F) FAS/Nairobi estimates and forecasts, respectively
 
Sugar
Kenya is a sugar deficit country with local production constrained by high cost production, and inefficiencies at processing and marketing levels. Kenya however continues to protect her domestic industry by utilizing safeguards offered by the Common Market for Eastern and Southern Africa (COMESA) to limit duty- free imports from COMESA countries to 350,000 tons per year. The Government of Kenya (GOK) has been keen on attracting new investments into the sector, and has commenced the privatization process for the state-owned sugar mills.

Marketing Year (May/Apr)

2014

2015

2016

2017 (E)

2018(F)

Local Production (TMT)

520

550

580

520

520

Imports (TMT)

325

350

256

270

320

 

(E) (F) FAS/Nairobi estimates and forecasts, respectively
 
Consumer-Oriented Agricultural Products
Growth in demand for consumer-oriented agricultural products is driven by an expanding middle class with higher disposable incomes, increased urbanization, and a growing food service sector. Kenya imports over 72 percent of consumer-oriented agricultural products mainly from Uganda, South Africa, Europe, India and the United States.  The food service sector (hotels, restaurants, and institutions) has recently attracted U.S. investment interests and several U.S. food service franchises have already established outlets in Kenya’s leading cities.   The growth tempo of consumer-ready food imports has however been negatively affected by Kenya’s import ban on genetically modified (GM) food products.

Calendar Year

2014

2015

2016

2017 (E)

2018 (F)

Local Production

NA

NA

NA

NA

 

Exports ($ millions)

1,306

1,224

1,246

1,300

1,323

Imports ($ millions)

255

281

288

300

310

Imports from the U.S. ($ millions)

12.8

10.6

12.7

12.5

13.0

 

(E) (F) FAS/Nairobi estimates and forecasts, respectively: NA – Data not Available
 

 

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Kenya Agribusiness Trade Development and Promotion