KENYA - Increased demand for sisal fibre by western and middle-eastern countries has led to rising exports creating a scarcity of the raw material for local spinners.
The price of the commodity has increased by 41 per cent since January driven by high global market demand.
The price a tonne has increased from Sh159,000 in January to Sh224,200 in the international market, making it the highest price registered in the sector.
“The demand for sisal in the export market has been on the rise. Export prices have continued soaring and were registering an all-time high of Sh224,200 per tonne in the month of October 2015,” said head of fibre crops directorate Anthony Muriithi.
Statistics from the fibre crops directorate indicate that in 2012, 24,000 tonnes of sisal were exported compared to 4,200 tonnes sold locally.
“Our local spinning factories are finding it hard to acquire the raw material given that they are not in a position to compete with the export market in terms of price,” said Naomi Kamau, manager at the directorate, noting that a tonne of sisal was selling for as low as Sh50,000 locally.
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Ms Kamau said local factories were mainly relying on small-scale farmers who produce less than 10 per cent of the commodity.
Premier Bag and Cordage had in 2014 said it was contemplating closing down owing to high prices of local sisal.
“We are contemplating closing down this factory as a result of the high cost of acquiring the raw material for use,” said the proprietor Diamond Lalji in an earlier interview.
Mr Muriithi noted more than 80 per cent of sisal fibre is exported to more than 30 destinations worldwide, with China, Saudi Arabia, Nigeria and Morocco leading the pack.
About 20 per cent of the sisal is used locally in the manufacturing of various products in the four weaving factories.
Part of the remaining 20 per cent fibre is also used in the rural cottage industry where various individuals and women groups make local baskets (ciondos), for local consumption or export, and private entrepreneurs who weave carpets and various rags for local consumption.
“Supply of the fibre has not been able to match the demand since the estates have no land for expansion,” said Mr Kamau.
The directorate has been encouraging farmers to grow the crop by carrying out sensitisation campaigns to educate growers on the economic importance of the crop.
The board also distributes free seedlings. About 37,500 hectares in the Rift Valley, eastern and coastal regions is under the crop. Sisal has mainly been a plantation crop with the 10 estates growing it accounting for up to 80 per cent of the production.
The main ones include Vipingo Plantations, Teita Estate, Kilifi Plantations Limited, Voi Sisal Estate and Agro Processors International (K) Ltd.