NAIROBI : Kenya‘s duty-free rice import policy is expected to increase demand for Indian rice, boosting its exports, while Pakistan-based participants expect little impact amid high prices, traders, exporters, and other market sources told Platts, part of S&P Global Energy, July 10.
According to an official notification released July 6, Kenya’s Cabinet Secretary for Agriculture and Livestock Development allowed 490,000 metric tons of Grade 1 milled white rice to have duty-free import access to the country on and before Nov. 30.
“The [Kenya] government wanted to stabilize the price, that’s it. Price down by 15%-20% in Kenya, importers who bought in June are under heavy pressure as duty is almost $220/mton rice imports in Kenya,” a Gujarat-based exporter said.
Pakistan and India have been key rice suppliers to Kenya this year. According to the latest S&P Global CERA estimates, Kenya imported 241,928 mt of rice from Pakistan and 234,727 mt from India in the first five months.
Kenya’s decision comes amid mounting weather concerns that are weighing on rice production outlooks across key importing regions, including in the wider East Africa market.
A Gurgaon-based trader said that it is good news for the Indian market. East Africa is currently experiencing intense heat, and it is likely that paddy production would be impacted by El Niño, which is why Kenya has removed the import duty, the trader added.
Most Indian exporters viewed Kenya’s duty-free removal as a positive development for India’s outflows, expecting it to strengthen demand for Indian rice.
A Delhi-based trader said Kenya’s removal of import duties on Indian rice is good news, and since Kenya is dominated by Pakistan-based participants, we might see more demand from them for Indian rice, as Pakistan’s WR is currently more expensive than India’s.
Platts assessed Indian 5% WR at $350/mt FOB on July 10, trading at a discount of $62/mt to Pakistani 5% WR.
The Delhi-based trader also said that imports are likely to be in bulk as container freight is too high, and likely only big companies would be able to supply to Kenya in breakbulk, so at the start, the business would be slow.
Opportunities for new crop in Pakistan
Pakistan-based market participants had mixed reactions, with some expecting losses on duty-paid old-crop stocks in Kenya, while others saw opportunities once new-crop shipments arrive.
“This policy will create further losses for existing Pakistani exporters and stockists in Kenya. All of them already have duty-paid stock there, and their costing is higher than the prevailing market rates. New crop people will export in August, I believe. This is a fresh start,” a Pakistan-based exporter said.
However, another Karachi-based exporter expects little impact on Pakistani exports, as the Kenyan market would also seek price-competitive options globally.
Kenyan rice imports are expected to be about 800,000 mt in the TY 2026-27, according to USDA estimates.
Amid these concerns, the Ahero Rice Farmers Association has called for greater transparency around the duty-free policy, noting that farmers were reportedly excluded from the decision-making process, according to local media reports on July 9.
Since duty-free rice imports impact rice-growing states in Kenya, the matter will be resolved in the high court post July 20, the reports said.
