Economy

Sisal export earnings up by 11pc on rising prices

sisal

A sisal farmer. FILE PHOTO | NMG

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Summary

  • The higher volumes were backed by price gains of about Sh10 per kilogramme of fibre between January and June.
  • During the six months, the average price of sisal was registered at Sh174.23 per kilogramme, up from Sh163.76 last year, representing a 6.4 percent raise.
  • The price was, however, still lower than the impressive Sh182.23 a kilogramme realised in 2017.

Kenya's sisal export earnings rose by 10.96 percent to Sh2.45 billion in the first half of this year compared to a similar period in 2020, buoyed by rebounding prices in key export markets.

Data by the Agriculture and Food Authority (AFA) shows export volumes of sisal fibre increased by 9.5 percent to 14,822.4 tonnes in the six months to June this year, compared to 13,533.8 tonnes the previous year — boosting overall export earnings, which rose from Sh2.2billion posted in a similar period of 2020.

The higher volumes were backed by price gains of about Sh10 per kilogramme of fibre between January and June.

During the six months, the average price of sisal was registered at Sh174.23 per kilogramme, up from Sh163.76 last year, representing a 6.4 percent raise.

The price was, however, still lower than the impressive Sh182.23 a kilogramme realised in 2017.

Despite the good run during the first half, production was affected in the three months to June due to prolonged drought experienced in the sisal growing areas, leading to the closure of some factories during the period.

"This could be attributed to market forces of demand and supply during the period under review, whereby demand for fibre has been on the rise but supply low due to drought during the period," AFA said.

The performance over the first half brings some relief to producers who recorded poor pricing in 2020 due to jitters caused by the pandemic in most export markets.

This has since softened due to the easing of supply restrictions and lockdown measures in some destination markets leading to a pick-up in demand.

Despite the pandemic, total earnings in 2020, exports were valued at Sh4.72 billion, up from Sh4.38 billion in 2019 and Sh3.79 billion in 2018.

Over the period, Kenya exported sisal to 24 countries, with Nigeria accounting for the largest export market with 3,850 metric tonnes.

Other destinations include Saudi Arabia (1,657.20), China (1,611.80) Ghana (1,305.10) and Morocco (980.70).

Kenya is among the world's third-biggest producers of sisal after Brazil and Tanzania.

The authority had projected a rise in earnings in 2018 boosted by the local demand jump following the ban of plastic bags in 2017 expected to increase demand for sisal fibre-made materials.

It had projected a rise to Sh50 billion by 2023. The agency pegged the expected demand on the replacement of plastic bags in the retail sector, especially supermarkets.

However, low local demand has been attributed to low-value addition and a lack of innovations of sisal-based products.

Locally the sisal is used for making ropes, bags, carpets, baskets, and furniture. Internationally, it is used in producing paper, ceiling boards, car bodies, clothes and even paper currency.

Sisal farming is largely carried out on a large scale in counties such as Taita Taveta, the largest producer by county, accounting for 35 percent of total volumes. Others are Kilifi, Baringo, Makueni, Kwale, Nakuru and Migori counties.

More than 90 percent of the sisal grown is exported as demand continues to rise globally due to the increasing need for eco-friendly materials.

The State agency had said the export of raw sisal bales denies Kenya an opportunity to earn higher revenues and create local jobs in value-addition activities.

It recommended heavy investment in processing and policy changes to make it mandatory for local firms to use sisal-based bags for packaging.

The policy was also meant to facilitate licensing of more sisal dealers to increase competition among buyers saying this could enable farmers to earn more money.

The Food and Agriculture Organisation says sisal has a promising future not only because of its new uses but also due to the growing public awareness that it is eco-friendly.

According to the directorate, prices for sisal fibre in the domestic market ranged between Sh50 to Sh100 per kg last year, serving as the main market for smallholder sisal farmers.

"Although no data was readily available, a lot of fibre was also sold to handloom weavers and hand weavers for making local basketry and other artefacts,"