Kenya realizes 4.6% rise in horticulture export earnings defying COVID-19 hurdles

KENYA – Kenya’s horticulture industry seems to have withstood the COVID-19 shocks registering a 4.6% rise in 2020 export earnings, accruing Ksh. 151.16 billion (US$1.37 billion) up from Ksh144.58 billion (US$1.31 billion) earned in 2019.

According to the Fresh Produce Exporters Association of Kenya, the sector performed fairly well despite recording a mixed bag of fortunes with the fruits and flower subsector registering increase in revenue while vegetables’ earning dropped.

Fruits raked in Ksh18 billion (US$164 million), up from Ksh13 billion (US$118 million) in 2019 from 104,000 tons of fruits including avocado and mangoes.

Flowers earned the country Ksh108.7 billion (US$992 million) an increase compared to the previous year’s Ksh104.1 billion (US$950 million).

The spike in flower exports benefited from higher average prices due to a reduction of supply in the international market. The reduction created big demand, with the sub-sector shipping 142,000 tonnes of flowers during the period under review.

Vegetables on the other hand registered a decline, earning the country Ksh24 billion (US$219 million) from 60,000 tonnes of produce, down from Ksh27 billion (US$246 million) in 2019 when it exported 73,000 tonnes of vegetables.

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Key vegetable exports include French beans and snow peas which are mostly sold to the European Union and Britain.

Okisegere Ojepat, CEO of the Fresh Produce Consortium of Kenya (FPCK) attributed the dip in vegetable exports to a decline in demand due to the lockdown measures instituted in the key markets aimed to mitigate the spread of the pandemic.

COVID-19 restrictions negatively impact the sector

The measures, which included the closure of borders, saw many farmers unable to export their produce as airlines grounded flights due to the inability to access certain markets that had also closed their airspaces.

During the uncertain period, farmers reported instances where they had to dispose of their produce after harvest as they had no markets to deliver them. The industry also announced mass layoffs.

It however, appeared to have turned the corner shortly after with many countries allowing cargo flights into their airspaces.

Fresh Produce Exporters Association of Kenya (FPEAK) Chief Executive Hosea Machuki said while earnings grew, they were eroded by the high cost of freight and cash flow challenges that businesses experienced.

“Despite the challenges brought about by Covid-19 pandemic, the horticulture sector performed fairly well. However, a huge proportion of these earnings went to the payment of air freights. The growers and exporters did not realise the kind of profits they expected,” said Mr Michuki.

Navigating the future  

The association has further indicated the sector is still experiencing a reduced market demand, high cost of airfreight, high cost of doing business as a result of government levies and taxes, cash flow problems and strict market requirements especially on sanitary and Phyto-sanitary matters.

To this end, the industry has appealed to the government to release a stimulus package finance to support exporters specially to subsidize air freight.

Also, they have recommended for the postponement of the implementation of the crops (Horticulture Crops Regulation 2019) that imposes an export levy of 0.25% on FOB on all horticulture exports.

Further to that they have requested the Ministry of Agriculture and Parliament to fast tract the legislation and enactment of the horticulture crops authority bill to enable better management and support to the industry.

In a bid to ensure their compliance to market requirements especially in Australia, UK & The European Union, they have called for the development of a fumigation facility for flowers and chilies and a hot water treatment for mangoes.

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