Earnings from key agricultural exports are set to recover from last year’s slowdown, economists at a UK firm have predicted, even as the threat of migratory locusts hangs over farmlands.
UK-based research firm Capital Economics says conditions in the agricultural sector are expected to rebound from last year’s delayed long rainfall season, in part narrowing Kenya’s current account deficit further.
United Nation’s Food & Agriculture Organisation (FAO) has warned the locusts’ infestation threat may escalate in the coming months as swarms which have already invaded the north-eastern and eastern parts of the country breed.
The agency does not, however, expect the migratory pests to spread to key farmlands.
“While this is the most severe outbreak in Kenya for 70 years, the economic cost is likely to be limited,” Mr John Ashbourne, senior emerging markets economist at Capital Economics, wrote in a note last Friday.
“The infestation is currently contained in the country’s thinly populated and economically marginal northern counties, and the UN does not expect that the bugs will spread into key crop-producing areas in the Rift Valley. Provided that these areas are spared, the outbreak may cause significant disruptions for local people, but should have little effect on key export crops.”
Income from key farm exports such as tea, horticulture and coffee dropped last year on the back of delayed rains and reduced prices in global markets.
Latest statistics show tea exports earnings dropped Sh23 billion or 16.43 percent, to Sh117 billion in the year through December, while coffee’s dipped $35.66 million, or 24.56 percent, to $109.56 million (Sh11.0 billion under current rates) in the year through September 2019.
Earnings from horticulture, which leapfrogged tea to become largest export earner in 2018, for the nine months through September 2019 declined 8.45 percent to Sh105.97 billion.