Market News

Kakuzi avocado farmers earnings fall 45 percent

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A worker at Kakuzi arranges avocados. PHOTO | POOL

Summary

  • Avocado farmers contracted by Kakuzi earned Sh31.4 million from the agricultural firm in the year ended December, a 45.6 percent decline from the year before.
  • Kakuzi says the price drop in the European market was caused by a higher fruit supply from Peru, and Columbia.
  • The Nairobi Securities Exchange-listed firm said the latest payout was equivalent to 87 percent of the net returns, an improvement from 85 percent in 2020.

Avocado farmers contracted by Kakuzi #ticker:KUKZ earned Sh31.4 million from the agricultural firm in the year ended December, a 45.6 percent decline from the year before.

The payout fell from Sh57.9 million, attributed to lower export quantities besides a decline in the price of the fruit in the international markets, the company says in its latest annual report.

The number of avocado cartons sold fell to 94,064 in the review period from 154,858 a year earlier.

This saw gross export sales decline from Sh132.7 million to Sh77.8 million from which Kakuzi deducted the costs of packing, distributing and marketing the produce before paying smallholders the bulk of the residual amount.

The net price per carton declined from a range of between €5.69 and €5.99 to between €4.78 and €5.03.

Kakuzi says the price drop in the European market was caused by a higher fruit supply from Peru, and Columbia.

The Nairobi Securities Exchange #ticker:NSE -listed firm said the latest payout was equivalent to 87 percent of the net returns, an improvement from 85 percent in 2020.

Kakuzi’s pre-tax profit from the dealings with the farmers more than halved to Sh2.3 million from Sh5.3 million.

The firm works with thousands of smallholder avocado farmers. It has been encouraging farmers to plant the Hass avocado variety due to its popularity and ability to attract good prices in the international markets.

Kakuzi says there is strong demand for avocados in the international market which it was unable to meet in the review period.

“Avocado production volumes were lower than in 2020, and we could not meet all of our customers’ orders,” the company said.

“However, it is instructive to note that the Kakuzi order book from the international markets was far more than we could supply, signifying continued market confidence and trust in our products.”

Avocado has become a significant export crop for local agricultural firms and independent smallholder farmers.

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