Saudi Arabia Overtakes China and India as Kenya's Top Two Import Markets

Saudi Arabia: Saudi Arabia is now Kenya's biggest single import market, surpassing China, India, and the United Arab Emirates (UAE) for the first time. This shows how crucial petroleum products are to the country's trade imbalance.

The largest economy in the Middle East saw an increase in goods imports of almost three times to Sh32.27 billion in March from Sh8.44 billion a month earlier, according to by KNBS (Kenya National Bureau of Statistics). This increase was due to higher orders of petroleum.

This was the month's largest import bill before India (Sh27.32 billion), China (Sh30.34 billion) and the UAE (Sh13.93 billion).

The KNBS records show that increased exports of petrol oil (Diesel), the majority of which had previously come from the UAE, were primarily to blame for the spike in Saudi Arabian imports in March.

Before the first delivery of fuel under the government-to-government agreement for the import of fuel with Saudi Arabia and the United Arab Emirates landed in Mombasa on March 10, there was an increase in the purchase of Diesel from Saudi Arabia as compared to the United Arab Emirates.

The KNBS numbers showed that diesel surpassed jet fuel as the top import by value from Saudi Arabia, the second-largest oil producer in the world, despite not being one of the top three goods bought from Saudi Arabia in the preceding months.

Oil marketers imported petrol oil worth a total of Sh13.84 billion in the review month, followed by jet fuel at Sh6.75 billion and fertiliser (Diammonium Phosphate) worth Sh6.51 billion.

Butanes (cooking gas), Polypropylene (plastics) and jet fuel were the biggest imports from Saudi Arabia in February, each costing Sh648.16 million, Sh1.06 billion, and Sh3.66 billion, respectively. The top three Saudi Arabian exports to Kenya in March 2022 were jet fuel ($2.78 billion), fertiliser ($2.57 billion), and cement clinkers ($1.16 billion).

China has been Kenya's primary supplier of goods like machinery, iron and steel, plastics, textiles, furniture, and electrical and technological equipment for more than ten years. Petroleum goods have been Kenya's main import during the past year because of increased global prices.

Due to increased sourcing of petroleum products from the Middle Eastern country, the UAE surpassed China and India to become the leading source of imports between December and February. The William Ruto administration described the increased volatility of commodity prices as a challenge for consumers and economic stability" in its 2023 Budget Policy Statement (BPS).

The cost of energy and transport is strongly weighted in the basket of goods and services used to determine the country's inflation rate.