Economic Survey 1990

Thus, since prospects for domestic exports are mainly dependent on the world economic performance, Kenya's exports of manufactured goods and horticultural products are expected to rise only moderately in 1990. However, foreign exchange earnings from coffee and tea are expected to record substantial increases on account of the current upswing of their prices. High demand for tea by the U.S.S.R., and increased domestic tea demand in India are expected to trigger a sharp rise in world tea prices in 1990. Kenya's tea export auction prices jumped from KShs.25.33 per kg. in February, 1989, to KShs.37.49 per kg. in February, 1990. The continuing dry weather in Brazil is expected to lower that country's coffee output appreciably. Also, frantic efforts are being made to revive the International Coffee Agreement that collapsed in July, 1989. Kenya may, therefore, expect a significant increase in earnings from increased price and demand for its coffee. The increase in coffee and tea earnings is expected to more than compensate for the sluggish growth in other exports. Overall, therefore, export earnings in 1990 are expected to be much higher than in 1989.