Kenya’s trade potential with Malaysia

Trade balance with Malaysia, is in favor of Malaysia, with exports to Malaysia representing only 0.40% of Kenya’s total exports in 2006. The value of exports to Malaysia however rose over the period 2004 – 2006 from US$ 5.2 million in 2004 to US$ 12.1 million in 2006, translating to an increase of 132.6% over the period. Imports from Malaysia on the other hand rose from US $ 41.3 million in 2002 to US$ 78.3 million translating to 85.1% increase relative to exports. Despite Kenya’s high growth in export to Malaysia relative imports, the trade balance almost doubled in favour of Malaysia, rising from US$ 1.88 million in 2004 to US$3.73 million in 2006. This is a clear indication of Kenya’s low value of exports to Malaysia. Kenya needs to improve the widening trade imbalance by venturing into export of products with high value.

The Export Promotion Council initiated this trade flow analysis report with the primary objective of providing comprehensive information and insights about Kenya’s export potential to Malaysia. The information is hoped to assist in creating awareness among Kenya missions, exporters, trade support institutions on export opportunities, and to provide policy makers with information required policy for interventions and export facilitation.

The report has identified areas where Kenya could expand exports to Malaysia. The specific products include black tea, tin ores, disodium carbonate, tobacco and fish fillets, in which Kenya has presence in the market. Other products which though not currently exported to Malaysia but similarly present opportunities are cut-flowers and Arabica coffee market. The Kenya mission in Malaysia is therefore invited to consider the recommendations of the report including organizing trade fairs & exhibitions as well as market research studies.

TABLE OF CONTENTS
LIST OF TABLES i
LIST OF FIGURES ii
EXECUTIVE SUMMARY 1
1.0 Background 2
2.0 Key Economic Indicators of Kenya and Malaysia 3
2.1 Malaysia Economic Indicators 5
3.0 Trade Flow Analysis 7
3.1 Kenya’s Foreign Trade: an Overview 7
3.1.1 Balance of Trade 7
3.1.2 Kenya’s Export Composition 8
3.1.3 Geographical Distribution 9
3.1.4 Kenya’s Merchandise Imports 10
3.1 Kenya’s Trade with Malaysia 10
3.3 Kenya’s Share in Malaysia’s Imports 11
4.0 Export Potential Products to Malaysia 11
5.0 Conclusion and Recommendations 15
5.1 Recommendations 15
6.0 Exporters and Dealers of the identified products 16
6.1 Useful Links 19
7.0 Annexes 20

LIST OF TABLES
Table 1: Proportion of Commodity Exports, 2004- 2008 (%) 8
Table 2: Value of Merchandise Exports by Region in Billion Kshs (2004- 2008) 9
Table 3: Kenya’s Trade with Malaysia (2004 – 2008) 10

LIST OF FIGURES
Figure 1 Proportion of Kenya’s Merchandised Exports in 2008 7
Figure 2: Kenya’s Trade Balance 2003-2008 8
Figure 3: Proportion of Exports by Region in 2008 9