Kenya’s fresh produce sub-sector is staring at massive losses at the onset of the peak season, as several international airlines withdraw their freight services from the Jomo Kenyatta International Airport (JKIA) for “better pay” in other markets ahead of the festive season and lack of a binding agreement for the airlines to serve the local market.
The situation inflicting the horticultural sector has been compounded by the Red Sea crisis, which has increased the cost of transit through the Egyptian waterway, Suez Canal, by $200 per refrigerated (reef) container, and prolonged the transit period by 10 days as vessels take the longer route through the Cape of Good Hope in South Africa to Europe.
The horticultural sector generated KSh157 billion ($1.21 billion) in export earnings in 2023, according to data from the Agriculture and Food Authority (AFA).
The Shippers Council of Eastern Africa (SCEA), a private sector membership organisation representing the interests of importers and exporters, confirmed the logistics crisis at the airport affecting fresh produce destined for export to the European market and urged the government to act swiftly to alleviate the crisis by allowing temporary permits for freighters to fill the gap, currently estimated at 800 tonnes, and to consider wet leasing of cargo airlines.
Wet leasing is paying to use an aircraft with crew, fuel and insurance for a short period. “The situation at the JKIA is worse this week. We are over 800 tonnes less than the same week last year,” said Agayo Ogambi, SCEA CEO. “This results in delayed delivery, loss of markets, and affects the shelf life of the products, resulting in huge losses. We are asking the government to consider temporary approval of freighters to fill the gap.”
We have reliably learnt that key international cargo airlines such as Qatar, Turkish and Magma Aviation, have removed some of their freighters, with CargoluxAirlines International SA, a flag carrier cargo airline of Luxembourg, expected to join the fray on October 4.
Sources said Qatar Airways removed two freighters carrying flowers from Nairobi to Liege, Belgium, resulting in a 200-tonne drop in capacity, while Turkish Airlines removed one freighter per week from Nairobi to Maastricht, Netherlands, affecting flowers and leading to a further 100 tonnes decline.
The reduced capacity has translated into increased airfreight costs from $2.3 per kilogramme to between $3.57 and $3.6 per kilogramme.
Higher demand
“Yes, it is true Qatar and Turkish Airlines have withdrawn freight services on some routes. I think it has to do with pricing. You know, we are entering the peak season, and some alternative routes could be paying better than us (Kenya),” a clearing agent at the airport who requested not to be named said.
The management of Qatar and Turkish cargo airlines did not respond to emailed questions at the time of going to the press.
“Thank you for contacting Qatar Airways Cargo. We have received your enquiry and one of our representatives will contact you shortly,” said Qatar Airways Cargo.
Calls and text messages to the cellphone of Kenya’s Principal Secretary for Agriculture Paul Rono went unanswered. According to the SCEA, foreign cargo airlines have been enticed by relatively “better” pay for their services in other global jurisdictions because of the increasing activities ahead of the festive season.
For instance, from Asia to the US, these cargo airlines are getting up to $8 per kilogramme, compared with Kenya, where they are getting $2.5-$2.8 per kilogramme “There is higher demand and higher pay for their services in other global markets.
“The other reason is that they don’t have a binding agreement to serve Kenya. Most of them are bilateral agreements, which do not bind them to operate here, and so they can leave at their own will. This is a contractual challenge,” Mr Ogambi said.
Global share of exports
The logistics crisis facing the fresh produce earmarked for airlifting to the European market through the JKIA has increased the cargo rollovers by 200-300 tonnes, according to the SCEA.
Kenya’s economy is firmly rooted in agriculture, with horticulture becoming one of the country’s main sources of foreign income by exporting flowers to more than 60 countries.
Kenya’s global share of exports of fruits and vegetables stood at 12 per cent and six percent in 2023 respectively.
Kenya’s share of global fruit and vegetable production was 0.5 per cent and 0.3 percent respectively in the same period according to data from AFA.
The major fruits produced in 2023 were bananas (34 per cent), avocado (23 percent), mangoes (16 per cent), oranges (5.8 per cent), and watermelon (five percent). Others were pawpaw, pineapple and lime.
The top fruit exports in 2023 were avocado, pineapples, mangoes, apples, oranges and raspberries.
Vegetables produced in the period were tomatoes, cabbages, kales, garden peas, bulb, onions, spinach and French beans.
