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Kenya risks losing EU market for fresh beans

Kenya is likely to lose her European Union (EU) market share of French beans to Morocco and Guatemala due to high cost of production, exporters have warned.

Favoured by efficient production factors, the two countries are said to have grown their market share almost edging out Kenya, a situation that might be disastrous to local farmers.

Fresh Produce Exporters Association of Kenya (FPEAK) new CEO Hosea Machuki said Kenya is grappling with high production and freight cost coupled with overpricing despite producing high quality beans.

Morocco, he said, though produces mainly bobby beans that are considered of lower value as compared to Kenyan products that are usually premium class has expanded her market share in EU owing to aggressive marketing and its proximity. He said that the north African country is also very aggressive in marketing its fresh produce while Kenya is not.

“We need to address the export numbers while still observing the highest standards which have made our French beans to be more preferred in the EU market,” Machuki pointed out during a horticultural industry meeting in Nairobi last Wednesday.

“Our French beans when they arrive in EU that are already overpriced due to high cost of production at farm level and freight cost over and above high taxation,” he added. A kilogramme of French beans sells for Sh25 to Sh30 locally, with shipping cost to the EU market at about Sh200, according to FPEAK.

In Guatemala, Machuki said the shipping cost is half at about Sh100 per kg, which translates to Sh180 from farm to the EU market. A four-kilogramme carton of French beans is priced at between eight and 10 euros (Sh925 and Sh1,156), translating to Sh231.25 and Sh289 per kg.

Machuki said deducting the cost of production and freight charges from the price per kilo, leaves the farmer with something between Sh50 and 110 for every kilogramme. “The cost of production in Morocco ranges from Sh10 to Sh15 per kg and less than Sh15 in Guatemala,” he added.

He further pointed out that the ban from January 2013 to July 2015 on French beans prompted the EU to source for new markets, a development which benefited countries like Morocco and Guatemala.

The ban was slapped on Kenya for exporting beans which contained illegal chemical. The leaves allegedly had high levels of Maximum Residuals Limits to the EU, contrary to trading requirements. Fresh export statistics from Agriculture, Fisheries and Food Authority-Horticulture Crops Directorate (HCD), shows a reduction of French beans exports by March.

Kenya exported an estimated 349 million kgs of French beans in January, 419 million in February and 354 million kgs in March this year. HCD interim head Zakayo Magara agreed that local production of French beans is facing challenges that need to be tackled to make it more vibrant.

“We have the advantage of producing quality beans and thus attracting premium prices. However, farmers are grappling with high cost of production and freight costs that are frustrating and keeping them from participating in the business,” he said.

To manage freight cost, Magara said the government is encouraging exporters to form units to enable them ship produce in bulk form instead of doing it individually.

Vegetable exports stand at 23 per cent accounting for Sh23.3 billion of the total horticulture exports to EU market last year. Machuki identified other challenges facing exporters as taxation and bureaucracy, adding that these make the shipping process long and cumbersome.