Market News

Agency seeks enforced sisal use for packaging

AFA says opportunity is lost in dwindling exports. FILE PHOTO | NMG 

A new report recommends heavy investment in value addition and policy changes to make it mandatory for local firms to use sisal-based bags for packaging.

The first quarter 2018 report by Agriculture and Food Authority’s Fibre Directorate noted export of raw sisal bales loses opportunity to earn higher revenues as well as generation of local jobs in value addition activities.

“We need to promote value addition locally in areas such gypsum, twines, carrier bags and sisal sacks. We must create links between the sisal products manufacturers with institutional consumers of sisal bags (National Cereals and Produce Board, coffee co-operatives, Kenya Coffee Exchange) and spinners through forums,” it said.

To stem price volatility where export price per kilo dropped from Sh182.23 realised last year to Sh167.11 this year, it suggests emulating Nigeria that opened new sisal product factories that cut exports in the past year.

“It is worth noting that Nigeria’s production volumes saw it drop to fourth exporter from second position as its sisal is now used for manufacture of ceilings for buildings,” it said.

The directorate said an urgent review of the sisal policy was necessary to facilitate licensing of more sisal dealers to excite competition among buyers saying this could enable farmers earn more money.

“The market share commanded by Wigglesworth Exporters can create monopolistic market structure as it has invested heavily in market research with satellite office in London where they are able to monitor and carry out market intelligence,” it noted.

Wigglesworth Exporters had the largest local market share, exporting a total of 3,402 metric tonnes, an equivalent of 60 per cent of the 5,632.40 tonnes total fibre. It was followed by Pack Enterprises (17 per cent) and exporter while Alepp Kenya enjoyed an eight per cent market share.

The directorate also sought funds to facilitate establishing of foreign sisal products manufacturers.