The horticulture industry in Kenya is experiencing a downturn in its share of the international market, attributed to rising production costs and logistic challenges. Industry stakeholders, including the Fresh Produce Exporters Association of Kenya (FPEAK), highlight stiff competition from nations such as Ethiopia, Tanzania, Uganda, Burundi, Rwanda, and South American countries.
Hosea Machuki, Chief Executive of FPEAK, cited high freight costs and logistical complexities as primary obstacles for Kenyan horticultural products in the European Union (EU) and other markets. This has led to a preference for fresh produce from other regions, rendering Kenyan exports less competitive due to elevated business expenses. Specifically, the cost to transport a kilogram of vegetables from Kenya to Europe via Amsterdam ranges from $3 to $5, in contrast to $1.5 to $2 from Eastern African counterparts.
Kenya, a significant exporter of fruits, vegetables, and cut flowers, primarily to the EU markets such as the Netherlands, France, and Spain, finds its position jeopardized. The Netherlands serves as a crucial hub for the European horticulture market and exports. Machuki pointed out that competitors are gaining an edge through government incentives aimed at reducing business costs.
The industry is exploring alternatives to air freight, which has become prohibitively expensive. However, the Red Sea crisis as of October 19, 2023, has extended the shipment period to Europe beyond 45 days, complicating efforts to shift from air to sea transport. Agriculture Principal Secretary Kipronoh Ronoh emphasized the urgent need to address these challenges, noting the industry's significant contribution of Sh157 billion in foreign exchange earnings in 2023. The extended transit times, especially via alternative routes through South Africa and West Africa, are exacerbating the cost and logistical challenges for perishable goods.
Ronoh acknowledged the industry's growth but stressed the ongoing challenges such as climate change, high production costs, and stringent market requirements that continue to undermine its sustainability.
Source: People Daily