Kenya’s decision to increase import duty on rice affects rice industry.Rice is the third main staple food in kenya after maize and wheat. Historically, rice is a cash crop for rural producers.
The Kenya’s recent decision of increasing the import duty on all varieties of rice as nearly to double had affected the rice industry.
A rice exporter of Pakistan told Business Recorder that purchasing power of Kenya’s rice importers had been reduced to half following doubling of import duty on rice by Kenya, thereby badly affecting small and medium enterprises involved in the business of exporting rice to Kenya.
Kenya has now fixed the import duty at 35 per cent or US $200, whichever is higher, on all varieties of rice.Export of only long grain white rice (non-Basmati) to Kenya is around 0.4 million tons every year, with a revenue of $180 million and, as such exporters, will have to pay a tax of $80 million annually to Kenya.
Although Pakistan has been importing a substantial quantity of tea from Kenya,but Pakistan has not increased the import duty on the Kenyan tea merely because Kenya is a regular importer of rice from Pakistan. Besides, all the landlocked countries neighbouring Kenya were also facilitated by Kenya for transit goods.
The, rice exporters have urged the Kenyan government to reconsider its decision of increasing import duty on all varieties of rice, or else it would badly affect the rice business of both the countries.
They also demanded of the Commerce Minister to take up the matter with his Kenyan counterpart so that small and medium enterprises of both Kenya and Pakistan could carry on their business smoothly. Commenting on the situation, industrial sources said: “The demand of Pakistan’s rice in Kenya is very high because of its quality but this import duty can reduce its export considerably.”