The moment air travel came to a standstill when Icelandic volcano Eyjafjallajoekull turned the sky from blue to grey last year has become something of a turning point for Kenyan growers and exporters.
Almost 12 months from the seven days that saw around €20 million wiped off exports, the sector has come together and worked to improve its facilities, rethink its strategy and extend the number of markets it supplies.
It has been a wake-up call, but even in the face of this unprecedented turn of events, strong prices for Kenyan fruit and vegetables boosted an export trade that dropped in volume but gained in earnings.
In fact, Kenya’s horticulture export earnings in 2010 rose by nine per cent, earning the African nation 78 billion shillings (£618m). The flower, fruit and vegetable export sector accounted for 71.6bn shillings of the country’s exports, making the sector the largest foreign exchange earner, ahead of tea and tourism.
Volumes, however, fell by one per cent and the slip has been put down to the flight ban over European airspace as well as the backdrop of continuing economic uncertainty.
Stephen Mbithi, who heads the Fresh Producers Exporters Association of Kenya (FPEAK), maintains that it is “incredible” that overall sales for the year showed growth after the impact of the volcanic ash cloud and other hurdles including the UK’s heavy snowfall at the end of last year, rising costs and price pressure. He believes that it will be possible for Kenya to double its export volumes in five years.
“Volcanic ash is history,” Mbithi insists. “We had lost the equivalent of five per cent but recovered to record a nine per cent growth year on year by the end of December 2010 compared to 2009. Vegetables and fruit showed good growth, while flowers dropped in value and volume as a result of the global economic meltdown.
“The snow pile up at the end of last year had a more devastating effect as it occurred at the peak selling Christmas time - but it is incredible that overall year sales showed growth after ash and snow.”
Kenya is home to 1.5m horticultural farms, but only 10 per cent are export-orientated so the potential for growth is being considered closely. The sector is building on the unusual events of the last 12 months and continuing to work on a number of initiatives that are now coming together to allow growers and exporters to take a more forward-thinking approach to their product portfolio, quality standards and opportunities for global trade.
Anne Gikonyo, general manager of marketing at the Horticultural Crops Development Authority, admits that the impact of the ash cloud pushed growers and exporters to raise their game. “Lots of lessons were learnt because with perishable commodities, no one wants to keep their produce in storage for long and everyone is now improving their cold chain facilities,” she says. “These are good points to come out of it and we have to focus on that. There was a lot of government help, both in keeping in touch with the situation and giving moral support, empathy and creating a community spirit.”
Alongside this, the country is stepping up its offer with a number of projects that could propel the Kenyan sector to a truly global status.
The country’s benchmarked certification system, KenyaGAP, is expected to be scaled up to tens of thousands of growers and become a blueprint to benefit the whole of Africa in the long term.
FPEAK is working on a €2.5m practical training centre for smallholders and farm workers, which is expected to be fully operational by June following some initial training in November 2010.
At the same time, Kenya is developing infrastructure and looking to new markets including Russia, China and the US to strengthen its position. A direct air link between the US and Nairobi is being set up and the project to rework the airport to divide international and domestic flights to aid security is expected to be completed slightly later than its initial target of 2012.
“There has been a remarkable change from last year,” says Gikonyo. “Firms are making company profiles and getting themselves out there and we have to equip businesses for the markets they want to target. That’s something we are trying to work on; we need strategies for different countries.
“Our exporters are investing in the tools of the trade and embracing standards, finding themselves and supplying niche lines. We appreciate our historical ties with the UK, but we have to do more to remind them that we are still here.
“Growers and exporters have to establish what the market wants and then go back and do it. This is a consumer-driven offer and competition in the UK is something we must acknowledge.”
A number of Kenyan growers and exporters turned out at Fruit Logistica last month in a bid to boost sales and a series of similar trips to Europe are in the pipeline as the sector makes a renewed effort to grow exports.
Sheila Wachania, marketing manager at Nairobi-based Homefresh Horticulture Export, insists that the UK remains a key market but admits that returns are becoming less attractive. The firm has supplied the UK for six years and sends a range of beans to the UK alongside its passionfruit offer, amounting to around four tonnes a week.
“Prices are a bit low and profit margins are too tight, but the volumes taken by the UK is a benefit,” she says. “We are trying to improve due diligence and traceability, but we would like the government to support us more so the market for Kenyan product can grow.”
In fact, a raft of lines that are not traditionally sourced from the country are expected to hit the market in the years to come, from chillies through to fruit including passionfruit, mangoes and avocados alongside more traditional lines such as vegetables and flowers.
“In five to 10 years, fruit exports will become a big business, especially avocadoes, mangoes and passion,” says Mbithi. “Smallholder summer flowers are going places and vegetables - snowpeas, sugarsnap and Tenderstem broccoli - will expand, green beans will level off because of competition from Morocco and Egypt, while roses will also stabilise.”
The opportunities for the Kenyan fresh produce sector are many, especially now that the effect of the ash cloud and tough trading conditions have conspired to encourage growers and exporters to rethink their approach to the market. How this will play out remains to be seen, but by working together to improve the range of products, standards and access to markets, the future looks bright.
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