THE KENYA CHINA AGRICULTURAL AGREEMENT
Kenya and China’s agreement for Kenya to export various agricultural products to its country opens new markets for Kenyan farmers.
This deal is expected to profit Kenya by increasing its income from its exports by tapping into China’s export market.
Currently; Fruits, vegetables, and flowers are the key foreign exchange earners for Kenya bringing KES 115.3B last year. However traditionally the main market for these products has been Europe.
This agreement now opens access to a market with a population of 1.4B people which is a bigger than Europe + North America combined.
China is already the world’s biggest farm produce importer, with its imports making up 10 percent of global farm produce trade. It is a net importer of bulk agricultural products such as grains, cotton, edible oils, sugar, meat, and milk.
China’s farm produce imports and exports both hit record highs in 2017, the country’s annual farm produce trade exceeded USD200B for the first time last year and still growing.
The agricultural products that are in huge demand according to Diario COMEX are meat, Dairy products, fresh and unprocessed fruits, fish preserves, sugars, and liquors. A piece by Mohamed Ahmed in the Daily Nation also points towards Avocado and Macadamia farmers being the first beneficiaries of this agreement.
HOW TO TAKE ADVANTAGE OF THE OPPORTUNITY
According to Benson Weru, Research Manager at Research 8020, this is a huge opportunity for Kenyan farmers. “The opportunity for our farmers is huge. According to our research; U.S. cherries, Australian beef, Chilean kiwifruit, German milk are foreign farm produce items that are increasingly common in China’s urban homes and with the right strategies, Kenyan produce can also curve its own space in Chinese homes.”
Although the potential opportunity is gigantic, Mr. Benson from Research 8020 believes that farmers need to do two things:
- Learn about e-commerce – we anticipate that most of the trade for these products shall be done online – access to internet and knowledge on online trading will be critical
- Produce in large volumes – with such a huge market, the demand will most likely be in metric tons.
With this we can expect a couple of millionaire and billionaire farmers a few years from today. However, further research is needed to quantify the size of the opportunity as well as the exact produce that would be of the highest demand.