Cancelled export orders hit horticulture

The coronavirus outbreak has brought Kenya’s horticulture sector to a standstill following cancellation of overseas orders, subjecting one of the country’s major sources of foreign earners to huge losses.

The Directorate of Horticulture says flower exports are the worst hit, with almost 100 percent of the orders having been cancelled.

Benjamin Tito, the head of the directorate, termed the situation severe, saying some flower farms in Naivasha have had to shut their operations.

“Flower have been negatively impacted with nearly all of the orders that had been placed having been cancelled so far,” said Mr Tito.

The situation has been worsened by the closure of the world’s largest flower auction in Amsterdam and suspension of flights, meaning that Kenya’s produce cannot access the world market.

The regulator said other farms had been forced to prune their flowers in order to rejuvenate the crop for future harvesting. “Fresh produce are harvested every day and when you skip they overgrow. In order to maintain the planation, growers have been forced to harvest and throw away the produce,” said Mr Tito.

The value of coffee at the weekly auction declined on Wednesday by eight percent to Sh19,998 from Sh21,836 in the previous trading.

“The weakness of coffee prices is due to the global spread of the coronavirus that is curbing demand for commodities, which includes coffee,” said Nairobi Coffee Exchange.

Fresh Producers Consortium of Kenya (FPC) said that the cancellation of orders mean flower farms will now have to cope with huge losses in the next couple of months.

Kenya exports over 85 percent of its flowers to Amsterdam where they are auctioned and bought by different European countries.

“We are now counting approximately Sh3 billion loss across the value chain in a day following a lockdown that has been brought about by the coronavirus. Our horticulture produce at the moment has been locked out of the market with the cancellation of orders,” said Ojepati Okesegere, the FPC chief executive.

Kenya’s economy significantly depends on the agricultural sector, with horticulture, tea and coffee exports being the most important drivers.

The second most important engine of Kenya’s economy is the tourism, hospitality and the entire service sector, which relies on people moving and getting services in restaurants, hotels and shopping malls, among others.

Earnings from horticulture dropped by 6.5 percent last year with the revenue from the sector this year expected to be hit again should the current standoff stretch for long. Coffee earnings also dropped by12 percent on account of low global prices.