Europe flight ban hits Kenya fresh produce exports - Washington Post

Europe flight ban hits Kenya fresh produce exports - Washington Post
By Duncan Miriri
Reuters
Monday, April 19, 2010; 12:09 PM

NAIROBI (Reuters) - Kenya's horticulture industry has lost $12 million to the volcano-induced European airspace closure and it will take several weeks to recover even if flights resume now, it's association of exporters said on Monday.

Horticultural exports are the leading hard currency earner in east Africa's largest economy, raking in 71.6 billion Kenya shillings ($924 million) last year. The sector provides thousands of jobs in a country with a high unemployment rate.

"It is bad. We have lost $3 million a night so that is a total of about $12 million as of last night," Stephen Mbithi, the head of the Fresh Producers Exporters Association of Kenya (FPEAK) told Reuters by phone.

FPEAK is an umbrella body that brings together 150 firms including growers of vegetables, flowers and fruit. Some 82 percent of total output is exported to the European Union.
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Mbithi said the country flies out 1,000 tones of fruit and vegetables every night at this time of the year and only about 100 tonnes left on Monday morning, destined for Spain.

"We want to see if we can open a corridor into Spain then we can send everything from Spain straight to Germany, Netherlands Belgium and everywhere we sell," he said.

He said more workers would be asked to stay away from farms after 5,000 employees, mainly harvesters, stopped working over the weekend when refrigerated stores reached capacity.

"The stores are full, there is no more space to keep anything, we are looking to suspend more work today ... we are only stopping harvesting workers," he said.

Foreign exchange traders said the Kenyan shilling was likely to remain under pressure against the dollar as the flight ban was bound to hit hard currency inflows.

SUPPLY GLUT

While cut flowers, which are mainly exported to Europe, and vegetables such as baby corn, baby carrots and green beans are air freighted, fruit exports were not affected because they are usually sent by sea, Mbithi said.

Fruit accounts for 5 percent of the value of total horticulture export earnings, while the rest is split between flowers and vegetables.

"This week there will be further losses whatever happens, even if cargo services resume, because there might be too much supply at once when the smoke stops," Mbithi said.

"If everything goes back to normal, then we expect that within two-three weeks, then we will go back to normal, that is prices and everything," he said. "So it is going to be a major short-term loss."

The chief executive of the Kenya Flower Council, Jane Ngige, told BBC radio on Monday that about 3,000 tonnes of flowers had perished since the flight disruptions started.

Tourism, however, which is ranked the third largest source of foreign exchange for Kenya after horticulture and tea, had largely escaped the fallout from the disruptions.

"It has had some impact but not much because April to end of May is our quietest season," Jake Grieves-Cook, chairman of the Kenya Tourist Board said.

(Additional reporting by Elias Biryabarema; Editing by David Clarke)