Horticulturists and fresh produce exporters in Kenya are facing losses at the start of the peak season, after several international airlines withdrew their cargo services at the main Jomo Kenyatta International Airport, citing lower returns compared to other routes.
The dire situation facing farmers and exporters has been exacerbated by the Red Sea crisis, which has increased the cost of transit through the Egyptian waterway of the Suez Canal by $200 (Sh25,795.06) per refrigerated container (reef) and lengthened the transit period by 10 days. Ships take a longer route via the Cape of Good Hope in South Africa to Europe.
The horticulture sector generated Sh157 billion ($1.21 billion) in export earnings in 2023, according to data from the Agriculture and Food Authority (AFA).
The Shippers’ Council of East Africa (SCEA), a lobby group representing importers and exporters, urged the government to quickly address the looming logistics crisis at Jakarta International Airport by allowing temporary approvals for cargo ships to fill the gap, currently estimated at 800 tons, and considering freight forwarding. Wet. Airline charter for cargo.
“The situation at JKIA is worse this week. We are over 800 tonnes below our capacity compared to the week last year,” said Ajayo Ogambi, CEO of SCEA.
“This leads to delayed delivery, loss of markets, and affects the shelf life of products, leading to huge losses. He added: “We ask the government to deeply study the temporary approval of cargo ships to fill the gap, which is currently estimated at about 800 tons, and which could worsen in the near future.”
Wet leasing refers to paying for the use of an aircraft with crew, fuel and insurance for a short period of time while dry leasing is for the long term.
Sources at JKIA revealed that major international cargo airlines such as Qatar, Turkish and Magma Aviation have temporarily withdrawn some of their cargo aircraft with Cargolux Airlines International SA, a Luxembourg-flagged cargo airline expected to join the fray on Friday (October 4).
The sources said that the withdrawal of cargo services by these airlines led to a significant decrease in carrying capacity, which led to the deportation of between 200 tons and 300 tons.
“That’s actually true. You know that this equipment is very expensive and these airlines are in business. Today, when you transport any of our products like flowers and vegetables, the prices are very low, and today the prices from China to the United States are very high.” In the region of $8 (1,031.79 shillings) to $12 (1,547.70 shillings) per kilogram and from India in the region of $10 per kilogram, the CEO of a logistics company who requested anonymity said: “In Kenya, prices are very low from $2 (257.95 shillings). ) to $3 (386.92 shillings) per kilogram.
The source added: “If you are a businessman you will invest where you get maximum returns and this is exactly what is happening with these airlines.”
According to SCEA, foreign cargo carriers have been tempted to charge relatively “better” fares for their services in other global jurisdictions due to increased activities ahead of the holiday season.
For example, from Asia to the US where these air freight companies get up to $8 per kilogram compared to Kenya, they get anywhere from $2.5 (Sh322.43) to $2.8 (Sh361.12) per kilogram.
“There is higher demand and higher wages for their services in other global markets. The other reason is that they do not have a binding agreement to serve Kenya. Most of them are bilateral agreements that do not bind them to work here and therefore they can leave of their own volition. This is a contractual challenge,” Mr. Ogambe said.
The logistical crisis facing fresh produce destined for air transportation to the European market through JKIA has led to an increase in cargo transportation by about 200 tons to 300 tons, according to SCEA.
Sources said that Qatar Airways has withdrawn two cargo planes carrying flowers from Nairobi to Liege (Belgium), resulting in a 200-ton reduction in capacity, while Turkish Airlines has withdrawn one cargo service per week from Nairobi to Maastricht (Netherlands), affecting flowers. Resulting in an additional reduction of 100 tons. .
The reduced capacity translated into increased air freight costs from around $2.3 (Sh296.64) per kilogram to between $3.57 (Sh460.45) and $3.6 (Sh464.32) per kilogram.
The management of the Qatari and Turkish shipping companies were unable to respond to our emailed questions by the time we went to the press, while calls and text messages on the mobile phone of Kenya’s Principal Minister of Agriculture, Paul Rono, were not answered.
“In regards to your inquiry and telephone conversation below and in accordance with our company policy, I regret to inform you that I am not authorized to provide information on behalf of the company,” said Humphrey Alwanga, Air Cargo Sales Manager, Qatar Airways – Kenya.
Kenya’s economy is based on agriculture, with horticulture featuring a prominent place. This sector has become one of the country’s major sources of foreign income, serving a wide audience by exporting Kenyan flowers to more than 60 countries.
Kenya’s global share of fruit and vegetable exports stands at 12 percent and 6 percent in 2023, respectively.
On the other hand, Kenya’s share of global production of fruits and vegetables was 0.5 percent and 0.3 percent respectively in the same period according to AFA data.
The main fruits produced in 2023 were bananas (34 percent), avocados (23 percent), mangoes (16 percent), oranges (5.8 percent) and watermelon (5 percent). Other major fruits were papaya, pineapple and lemon.
The most important fruit exports in 2023 were avocados, pineapples, mangoes, apples, oranges and berries.
Other important vegetables produced include tomatoes, cabbage, turnips, peas, onions, onions, spinach, and French beans.
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