Trading volume with China down as shipping costs rise

Trading volume with China down as shipping costs rise

By Antony Mutunga

A year after COVID arrived, the impact of the pandemic continues to be felt, especially on the business and employment fronts. In particular, it has greatly affected trade between Kenya and her biggest trading partner, China.

As the pandemic bites, the volume of import goods arriving from China has significantly climbed down. As the number of empty shipping containers has risen, so has the cost of shipping. For Kenya, the cost of importing from China has risen by 66%, with traders have to pay a premium. In December 2020, the cost of shipping a 40-foot container from China increased from Sh330, 000 to Sh550, 000, a price increment that has, inevitably, been passed on to consumers.

A significant percentage of goods in Kenya, including utensils, furniture, electrical appliances, clothes, and even heavy machinery are shipped in from China and other Far East countries.

Some, however, see this turn of events as a boon to the local manufacturing sector, which may have to produce enough to replace Chinese goods in the interim, and even in the long term. This also means that the government must deliberately facilitate such industry and innovation by advancing and implementing policies that encourage rather than stifle local manufacturing.

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