17 September 2018

Kenya: Fertilizer Shortage to Increase Kenya's International Flower Prices

Delays at the port of Mombasa as a result of new and stringent measures on local inspection of all fertilizer imports have caused a massive shortage in the country.

The measure introduced by Kenya Bureau of Standards (KeBS) are allegedly grinding farm operations to a near halt with devastating effects.

Kenya's flower grower and exporter Oserian Development Company has sounded the alarm blaming this lengthy clearance process that now takes up to 2 months before the release of consignments.

While KEBS has traditionally certified the quality of fertilizers in the country of origin before shipment, it has introduced a new set of rules which include re-inspecting all consignments at the port of entry as it seeks to tame proliferation of counterfeits.

The Director of Human Resources and Administration at Oserian, Mary Kinyua, says fertilizer suppliers are incurring up to Sh2 million shillings daily in demurrage which they are passing to them, further pushing up the cost of producing flowers.

Oserian is predicting a dip in yields and increased flower prices, which it says will be the case among other growers as they seek to compensate their margins, making Kenyan flowers costlier at the competitive global market.

"The flower industry has this year already been hit by bad weather, pest and disease pressure, the high cost of production as a result of increased fuel cost and fluctuating markets. This bottleneck within our borders will only make things worse," Kinyua said.

Oserian is a frontrunner in hydroponics technology that embraces the use of a soilless medium to grow flowers. The technology relies on fertilizers to feed flowers. A shortage even for a day disrupts the entire production cycle which ultimately negatively affects markets and earnings.

If the trend continues, Oserian says that it will have far-reaching effects to the industry and the economy.

"The consequences of further delays will affect our businesses through low or no revenues which will lead to massive job losses, lack of foreign earnings, government will not raise tax and this will lead to a complete shutdown of an industry that has been built in the last 30 year and made impressive gains," Kinyua added.

Oserian's alarm comes days after the industry's umbrella body, Kenya Flower Council warned of a looming crisis if the government does not address the current delays.

"We are doing everything possible to support our members in unlocking the situation as soon as possible to avert the total collapse of the industry," KFC CEO Clement Tulezi said in a communique to members.

KFC has reached out to the government in a bid to avert the unfolding crisis by looking at ways of expediting the inspection including immediate release of fertilizers that have passed the inspection test to ensure growers get the input in time.

"As much as KFC appreciate the controls KEBS is putting in place to ensure quality and conformity to standards, the process should be quick and facilitative to the industry," Tulezi added.

Kenya

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