The price of Kenyan sisal has been on a free fall since April this year as a result of cheap sisal from Tanzania dominating the world market and taking its toll on local producers.
Data by the Directorate of Fibre Crops show earnings dropped from Sh177 per kilogramme in April to Sh156 for the same quantity last month. In comparison to the same period last year, the value has dropped from Sh163 in June 2016 to Sh157 in the period under review.
Interim head of the directorate Naomi Kamau blamed Tanzania, which is the second leading producer of the fibre after Brazil, low prices at the world market for leading to depressed cost globally.
“Tanzania continues to supply fibre to the world market at a much lower price in what has continued to depress the prices globally since April this year,” Business Daily reported Ms. Kamau as saying.
Ms. Kamau said Tanzania has forced Kenyan sellers to lower their price in order to remain competitive in the world market.
Sisal production is big business in Tanzania and today, the sisal industry employs over 100,000 people, with a total production of about 40,000 tons, according to Tanzania Invest.
According to the latest data by the Bank of Tanzania (BOT), the country exported 793 tons of sisal in Q3 2016.
The main markets of Tanzania’s sisal have mostly been the European Union (EU), the Russian Federation, the former Yugoslavia, Japan, India, China and Pakistan and recently to Saudi Arabia, Iraq and Iran.
In Kenya, over 80% of sisal fibre produced is exported to more than 30 destinations worldwide, with China, Saudi Arabia, Nigeria and Morocco leading the pack.
About 20% of the sisal is used locally in the manufacturing of various products in the four weaving factories in the country.
A kilo of sisal at the international market in the first six months of 2018 averaged at Sh166, compared with Sh161 in a similar half of 2019, according to the directorate.
Production of the crop last year, says the directorate, increased marginally to 23,187 tonnes from 22,549 tonnes in the previous season.