- Kenya is set to lose Sh51 billion worth of agricultural exports in four months of Corona restrictions
- Horticulture, tea and coffee, the main agro exports of Kenya that were collectively earning Sh21.4 billion monthly last year have fallen by about 40 percent
Kenya is set to lose Sh51 billion worth of agricultural exports in four months of Corona restrictions. Experts have forecast worsening earnings outlook of key agricultural commodities. Horticulture, tea and coffee, the main agro exports of Kenya that were collectively earning Sh21.4 billion monthly last year have fallen by about 40 percent which translates to an annualised loss of Sh150 billion. The outlook for 2020 looks bleak with the need for support from the central government.
Late 2019 witnessed a sharp fall in demand from the Europe when various flower auctions in Europe closed down in Covid-19 containment measures, and cancelled orders, cutting Kenya’s exports and pushing the flower industry to the edge. Leading floriculture companies like Finlay’s decided to close its two farms employing about 1,000 workers, Karuturi announced laying off more than 3,000 workers while Oserian Farm was to fire 400 staff. As of now, the European market has shown modest signs of picking up to levels between Sh450 and Sh700 per kilogram from Sh130 to 330/kg in January. However, freight costs have shot up over the Covid-19 period. Low demand in the key destinations and production disruptions locally due to transportation issues have become major challenges for the industry according to Bernard Kiarie, chief executive at the African Alliance Kenya.
The ravages of locusts and floods that have wreaked havoc across the country have created serious implications on forex earnings from agriculture. Foreign-based airlines have resumed flying to Jomo Kenyatta International Airport (JKIA) as European countries start easing Covid-19 lockdowns. These include British Airways and Singapore Air, Ethiopian Airlines flying daily from JKIA, KLM three times a week and Kenya Airways (KQ) also making a couple of trips to Europe and China. Emirates SkyCargo introduced two weekly flights last month. Freight charges at the moment are between $2.8 and $3.5 per kilogram of cargo that should cost about a dollar under normal circumstances. The European market normally imports fresh produce from Africa and the US. The US is still largely under lockdown.
