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Kenya’s fresh produce now ranked third highest foreign exchange earner

Fresh Produce Exports
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Kenya’s earnings from fresh produce exports in 2018 jumped to Sh153.68bn, a 33 per cent increase over 2017 earnings, according to the statistics released by the Kenya Flower Council (KFC), Fresh Produce Exporters Association of Kenya (FPEAK), and Fresh Produce Consortium of Kenya (FPCK).

Fresh produce currently ranks as the third highest foreign exchange in Kenya after tourism (Sh157bn) and foreign diaspora remittances (Sh272bn).

Unveiling the statistics, Mr. Hosea Machuki, Chief Executive Officer of Fresh Produce Exporters Association of Kenya said the sector has remained resilient amid various challenges, both fiscal and operational.

“The sector has seen marked resilience and continued growth and huge potential which has enabled it weather various challenges such as the Brexit shock and fertilizer shortages which the sector faced,” said Mr. Machuki said.

Flower exports contributed Sh113.16bn up from Sh82.24bn earned in 2017, representing 37.8 per cent growth.

Fruits and vegetables earned Sh12.83bn and Sh27.68bn in 2018, up from nine billion shillings and Sh24.06bn earned in 2017, respectively.

The cut-flower export still remains the largest earner, contributing 74 per cent of the total fresh produce annual earnings, fruits at eight per cent and vegetables at 18 per cent.

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In 2018, the horticulture industry was hit hard by acute shortage of soluble fertilizer resulting from stringent and lengthy clearance process by the Kenya Bureau of Standard at the port of entry. The sector was also hit by the imposition of 16 per cent value added tax (VAT) on pest control products and VAT return estimated to be Sh3.5bn, increasing the cost of production, resulting in non-competitiveness in the international markets.

“These challenges has compounded the many challenges Kenyan farmers face including numerous taxes, and levies at national and county governments, high energy costs, trade and phytosanitary restrictions in several potential markets, and the recent notice on closure of run-way during the valentine peak season,” said Clement Tulezi, chief Executive Office, Kenya Flower Council.

Speaking at the same event, Principal Secretary, Ministry of Trade Dr. Chris Kiptoo said the Government was working toward expanding the export market for the horticultural products besides the primary European markets.

“The government is exploring new markets like china to complement the traditional European market. Already a delegation from China will be in the country soon to evaluate the avocado market and we are optimistic soon our farmers will start export to the Chinese market. US market is also key for us, following the commissioning of the direct flight between Kenya and the United States,” Dr. Kiptoo said.

Dr. Kiptoo also noted that the Government was in discussion with the United Kingdom on the issue of Brexit to ensure that the sector is not adversely affected, irrespective of the outcome of the process.

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