The eruption of Icelandic volcano Eyjafjallajokull in mid-April had severe repercussions for the Kenyan fresh produce industry. The East African country normally exports 1,000 tonnes of fresh produce and flowers every day, but activities ground to a halt as a six-day flight ban was imposed. According to estimates, the Icelandic volcano cost Kenya in excess of £15 million in lost exports.
Coldstorage facilities at Nairobi’s Jomo Kenyatta International Airport were full with produce and farmers had to destroy fruit and vegetables harvested earlier in order to make room for fresh crops.
According to reports, roughly 3,000t of flowers were estimated to have perished. Mountains of asparagus, broccoli and green beans were either discarded, given to orphanages or used as animal feed. Labour was reallocated or reassigned to maintain and prepare farms and reports from the country claimed that no less than 5,000 farm workers were temporarily laid off.
The Icelandic ash cloud also disrupted Kenya’s flower industry, the country’s single biggest export earner.
“Customers did not get their regular supplies and in desperation, companies were forced to seek alternative routes to destinations,” says Jane Ngige, Kenya Flower Council chief executive. “This obviously escalated costs, depleting resources to further upset the bottom line, which was already scuppered by the global financial crisis.”
In response to the flight ban, some producers explored landing their produce in Spain and Portugal and then trucking it across France to the UK. Industry players also began considering seafreight as another viable alternative.
Once the ban was lifted, airlines were accused of taking advantage of the situation and hiking their freight rates. Clearing the backlog took longer than initially anticipated and sources say it could take six months at the very least to recover lost revenue.
The airfreight sector has now returned to near normal service, but all parts of the supply chain have been disrupted.
“The supply chain suffered significant losses, which will not be recovered in business interruption, product waste and increased costs of getting product to market during the crisis,” says Danny Grover, senior national account manager at Wealmoor.
Indeed, the effects continue to be felt and the impact on smallholders has been significant, says Dr Stephen Mbithi of the Fresh Produce Exporters’ Association of Kenya. “Some have no money now to buy new seed and fertiliser because they lost their crop and normally, they use the proceeds as capital for their next crop,” he adds.
The volcanic disruption has been blamed for the drop in earnings from horticultural exports, which fell by 25.2 per cent to 19.5 billion shillings (£154 million) in the half year to June, according to the Nairobi-based Kenya National Bureau of Statistics.
The volcanic eruption inevitably caused severe disruption but it comes on the back of a number of other fundamental issues at play.
Kenya has suffered high inflation for the last three to four years and coupled with an unfavourable exchange rate, the fresh produce industry is facing rising costs. Kenya also endured a severe drought in 2008-09, followed by heavy rain, which disrupted production.
However, Shamit Shah, financial director of the Sunripe Group, says that the Kenyan industry has largely managed to contain these extremes. “Kenya does have great diversity and depth in terms of production areas and with good planning and some anticipation, we have managed to mitigate most of the effects of the last 18 months,” he adds.
Certainly, Kenya has retained its reputation as a high quality vegetable and flower supplier to the UK market, supplying a wide range of products year round. In addition, the country’s fertile soil, advantageous location on the equator on Africa’s east coast and a small, three-hour time difference between Kenya and the UK means it’s a favourable country to trade with.
Grover says overall demand for Kenyan pre-packed vegetables remains firm, with good growth in prepared vegetables. He admits that runner bean demand appears to be slowing, though the industry is working hard to maintain sales, while fine beans and Tenderstem broccoli continue to show good growth. “Demand has proved resilient to buffeting from currency, freight and weather challenges with products broadly fitting with eating trends being versatile and convenient,” Grover tells FPJ.
Sunripe Group’s range of products encompasses more than 40 different lines. As well as the standard pre-packs of beans, snow peas, sugar snaps, baby corn and runner beans, it also offers more niche lines such as high-care shelled petit pois, shelled broad beans, baby vegetables and baby salad onions.
The firm says it pioneered the launch of fresh, shelled edamame beans into Waitrose in early 2009 and the producer also introduced Kenyan baby Brussels sprouts this year. “Our lines have been a huge success and have helped enhance our capabilities,” Shah reports.
Kenya has enjoyed success in the UK and according to the Kenya High Commission, UK demand for Kenyan agricultural products is rising, growing from 23.5 per cent in 2007 to more than 25.8 per cent last year.
Michael Mandu, commercial counsellor for the Kenya High Commission, points out that Kenyan produce is well established in the UK’s leading retailers and wholesale markets.
However, sources agree that wide-ranging issues need to be addressed and the country is battling ever-growing competition from other producers.
“At certain times of the year, this competition is becoming a major factor and customers are switching away from Kenya during these periods as other origins are cheaper - which makes our 12-month production less sustainable,” says Shah.
Grover warns that if the supply chain is kept under the pressure that it has been, investment, contingencies and innovation will stall. “Availability of product is impacted and to some extent this is already visible,” he adds.
Kenya has also come under fire for its reliance on airfreight, as the country provides just under a quarter of all the fruit and vegetables that are airfreighted into the UK. Supporters argue that Kenya uses less carbon-intensive farming methods as produce is grown with sunlight, rather than heat lamps. The International Institute for Environment Development further assesses that airfreighting produce from Africa accounts for just 0.1 per cent of Britain’s total carbon emissions.
Mindful of the food miles issue, Sunripe has embarked on a two-year project in collaboration with a doctorate student from Writtle College in Essex, the Jomo Kenyatta University of Agriculture and Technology and the British Council to compile a comprehensive life-cycle analysis to measure its carbon footprint by product line and by season.
Though food miles certainly register as a consumer concern, Grover says it’s unclear how this translates into shopping patterns. Wealmoor says it is keen to engage in an informed debate and hosted a documentary with TV presenter Jimmy Doherty last year. “Even Jimmy, a staunch advocate of local food, came to a conclusion that on balance the positives outweighed concerns,” Grover says.
A political initiative could also throw up challenges. The UK coalition government has mooted new air tax proposals and sources say this will affect all those industries that are dependent on using airfreight as a main route to market.
In these uncertain times, Kenyan producers are looking at seafreight to help ease the situation.
Sunripe is confident that some of its more conventional lines will be seafreighted in the future. One of the biggest obstacles has always been the 30-plus days it takes to seafreight produce from Mombasa to Europe and Shah says that until now, avocado is the only seafreighted product out of Kenya.
However, Sunripe is working closely with a shipping line that will reduce transit times from Mombasa to Marseilles to 16 days. The first trials have already been successful. “This opens up a whole new universe of possibilities,” Shah explains. “It would make our products competitive again all year around and increase sales.”
While the UK and Kenya enjoy a close trade relationship, Shah says that the Kenyan industry needs to engage consumers and make them aware of the benefits of their product. These benefits include the supply of high quality, good shelf life product and improved efficiencies.
“Kenya has exported vegetables to the UK for almost 50 years and we have consistently evolved and developed new ideas and products,” says Shah. “We are fully conversant with UK and EU food safety standards and also have a fairly stable political environment, which is conducive to social and economic development. This will benefit the poorest sections of society, who live in rural areas and depend on agriculture.”
Despite the obstacles, sources say it’s still an exciting time for Kenya and the UK’s reliance on the country for flowers and a number of vegetables has not happened by default.
KENYA SAYS IT WITH FLOWERS
Kenya exports 20 per cent of its flowers to the UK and these are sold through supermarkets and florists. According to Jane Ngige, Kenya Flower Council chief executive, the main challenge facing Kenyan producers is exacting customer requirements.
However, she believes that the opportunities lie in securing markets with the possibility of diversifying products and penetrating new areas. Indeed, producers are interested in exploring opportunities in Japan.
“In the medium term, the industry expects to sustain its markets, albeit with difficulty,” Ngige says. “Fortunately, the quality of Kenyan flowers means they can hold their own in the marketplace.”
FAIRTRADE BOOST FOR KENYAN VEG
The late May arrival of Fairtrade Kenyan vegetables on UK shelves heralded a first for the country. Marks & Spencer and Sainsbury’s hit the headlines when they announced plans to sell Kenyan green beans in their stores. The beans are produced by 34 grower groups in Mweiga and Meru, before being sold to Homegrown Kenya Ltd, a Fairtrade-certified plantation.
M&S says green beans will be closely followed by other Kenyan products, including mangetout, snow peas, sugarsnap peas and garden peas.
“I am confident Fairtrade produce will boost our exports,” says Michael Mandu, commercial counsellor for the Kenya High Commission in London. “Most supermarkets now consider ethical standards before buying.”
Meanwhile, several Kenyan businesses have benefited from the Technical Assistance Fund, according to the Fairtrade Foundation. “This fund gives companies the opportunity to apply for support with technical assistance such as improving the quality of their produce and securing higher prices,” explains the Fairtrade Foundation’s Reena Agarwal.
In addition, the African Fairtrade Network is working on country partnerships to support Fairtrade producers to work as a network and request support from local institutions for financial and technical support.
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