Kenya is staring at a possible loss of the multi-billion-shilling Australian flower market after the country passed new stringent rules that could lock out exports to the country.
The new set of rules to be effected on September 1 require all the horticultural produce exported to Australia to have zero levels of pests.
Flowers exported to the country are currently fumigated at the port of entry in Australia before getting into the market.
“It is very difficult for us to comply with the zero pest requirement given that we do not have necessary infrastructure in place at the moment,” said Fresh Produce Consortium (FPC) of Kenya chief executive officer Okesegere Ojepat in an interview.
The Kenya Flower Council estimates the value of Nairobi’s rose flower exports to Australia at Sh2.7 billion.
The new directive was to be effected on July 1, but Kenya put in place a strong case to delay its implementation.
The cut-flower export still remains the largest earner of horticulture, contributing more than 70 percent of the total fresh produce annual earnings.
Flowers made the bulk of the earnings bringing in Sh113 billion last year, with fruits raking in Sh12 billion and vegetables Sh27 billion.
Under the new regulations, Kenya’s exporters will be required to fumigate their produce at least 18 hours at the point of origin before it is exported, which does happen at the moment.
Flower dealers are concerned that Kenya might not have the capacity to put up a full-fledged fumigation infrastructure in place within the set deadline as there is none at the moment.
“For us to put up a fumigation plant, we need at least Sh500 million to meet the cost of this facility,” said Mr Ojepat.
“The country is simply not ready for this fumigation exercise and I am afraid that we might fail to meet the deadline, a move that will spell doom not only to our exports but also the foreign earnings to the country,” he added.
Government officials and stakeholders from horticulture associations visited Australia last month for negotiations on the new regulations.
The Kenya Health Inspectorate Service, the State agency tasked with the checking of phytosanitary compliance, was part of trip.
They told the Australian officials that they would require their support to meet the set demand.
Horticulture earnings hit Sh153 billion last year, making it number three in its contribution to Kenya's forex income after diaspora remittances (Sh272 billion) and tourism (Sh157 billion) in 2018.
The sector was affected by the imposition of 16 percent Value Added Tax on pest control products, which KFC argues has increased the cost of production, making Kenya’s produce uncompetitive in the international markets.