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Shipping & Logistics

Fresh produce exports fall as demand in Europe slows

Workers at Molo River roses flower farm in Nakuru
Workers at Molo River roses flower farm in Nakuru. FILE PHOTO | NMG 

Diminishing demand for fresh produce in the European market has seen freighters cut down on their weekly flight frequencies to the continent.

High seasons in the European market are always between September and May after which the demand for fresh produce goes down as summer kicks in.

Europe is a major buyer of Kenya’s horticulture crops, with over 60 percent of the produce finding its way to the continent.

During summer, most of the countries produce their own crops with many people going for holidays, cutting down demand.

“We have witnessed a declining demand because of the low season in Europe, which is normally a tradition around this time of the year,” said Sanjeev Gadhia, the chief executive officer of Astral Aviation.

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Freighters are now doing more flights on intra-Africa routes. However, Kenya Airways is still servicing Asian market, mainly to China with three cargo flights slated for this week.

Astral Aviation, which has been operating five flights a week to Europe, has now cut the number to four with a likelihood of reducing further depending on demand.

The carrier is at the moment doing 20 intra-Africa flights a week, which is an increase from 14 it operated at the same time last year.

Mr Gadhia said the traffic within Africa is good and the rates favourable basing on what they are charging at the moment.

Fresh Produce Association of Kenya chief executive officer Ojepat Okisegere said a rise in demand in Europe might come earlier than expected because of the Covid-19, which saw a lot of crops destroyed on the farms.

“Because of Covid-19, there were a lot of crops that were damaged on farms and this might see the demand pick up as early as next month as opposed to September,” said Mr Okisegere.

A kilo of cargo is going for Sh265 from Nairobi to Johannesburg with the same quantity to Europe at Sh212.

Cargo volumes at the Jomo Kenyatta International Airport (JKIA) have dropped to about 2,500 tonnes a week from about 5,000 tonnes, with freight charges following suit to settle at an average of Sh212 a kilo from Sh530 in March.

High cost of cargo in March was occasioned by high demand of freight services amid declining numbers of cargo operators at the JKIA as most of the carriers pulled out of Nairobi following flight disruption caused by Covid-19.

Commercial passenger flights have so far resumed in some parts of the world with the national carrier KQ expected to commence cross-border services in in August.

The carrier has been conducting cargo flights using the passenger aircraft following a surge in demand for freight services in April and May.

In a recent meeting with fresh produce stakeholders, the carrier expressed need to acquire high capacity aircraft such as B777 type in order to effectively evacuate huge cargo to Europe at favourable rates.

The airline underscored the importance of a strong national carrier backed by the right type of aircraft to support the huge horticulture and flower export potential.

According to Dick Murianki, head of KQ cargo, JKIA is a leading export airport in Africa in terms of air cargo volumes and “there is a strategic national importance in safeguarding this status due to its multiplier effect in the economy in general and JKIA ecosystem in particular.”

Fresh produce exporters want the Sh1.5 billion horticulture stimulus kitty that has been released by the government to be given to Kenya Airways as a subsidy to the carrier, to help cut high freight charges.

FPC says the current freight charges are still higher and make Kenya’s products at the international market expensive.

President Uhuru Kenyatta announced a Sh53.7 billion stimulus programme in May to jump-start the economy following the ravages of Coronavirus.

About Sh1.5 billion was set aside to support flower and horticulture producers to access international markets.

Mr Okisegere also wants the government to support the national carrier in acquiring high capacity aircraft to help in evacuation of cargo to the global markets.

Flowers normally form the bulk of the horticulture export from Kenya but the closure of the auction saw a significant reduction in amount of flowers that have been shipped out of the country between March and May.

The cut-flower export remains the largest earner in the sector, having contributed 73 percent of the total fresh produce annual earnings in 2019.

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