Kenyan avocado retailers cope with difficulties because of interruptions within the Middle East, which have really enhanced merchandise bills and transportation occasions. Instead of pulling again, they require to extend manufacturing, department out markets and enhance framework to proceed to be inexpensive.
Kenya is among the many largest retailers of avocados worldwide with 3,000 to 4,000 reefer containers of the nutrient-dense fruit leaving the Port of Mombasa each interval.
Every 12 months, Kenya’s avocado export interval begins on the finish of February and goes until October relying upon the vary of avocados exported. Thus we’re actually close to the beginning of a brand-new interval. However, there’s something that goes to the highest of each Kenyan avocado service provider’s thoughts: the circumstance within theRed Sea Because higher than 90 p.c of all their avocados take the ocean path and subsequently accessibility to their important markets in Europe is restricted.
The steady dispute within the Middle East and the Houthi assaults on the Red Sea have really prolonged the Kenyan and East African disposable logistics to their limitation.
“We’re right at the edge of what is technically possible,” states Christopher Flowers, Managing Director, Kakuzi.
Unless we get hold of each little factor 100% proper in regards to the fruit maturation, pulp temperature ranges, chilly chain temperature ranges and the administration of gases, that fruit is lifeless on arrival.
Christopher Flowers, Kakuzi
Supply chain prolonged to limitations
Before the Red Sea interruptions, nearly all of these avocados utilized to preliminary touring on smaller sized ships from Mombasa to the Middle Eastern ports in Oman’s Salalah or UAE’s Jebel Ali previous to it was moved to bigger vessels, took a visit with the Suez Canal to enter the Mediterranean Sea and gotten to Europe inside one month. Due to the Red Sea assaults, these avocados which nonetheless make a journey to the Middle Eastern transhipment ports, boil down fully again earlier Mombasa and make a journey with the Cape of Good Hope to enter the Atlantic Ocean and accessibility Europe.
“We’re now adding at least two weeks,” educates Flowers.
According to him, the controlled-atmosphere containers can keep the velvety fruit for an optimum of fifty days. Our capability to cope with that fruit upon arrival and relocate to shoppers is at the moment at all-time low.
“We’ve got no safety margin whatsoever in the life of that fruit.” he defined.
“Unless we get everything 100 percent right about the fruit maturity, pulp temperatures, cold chain temperatures and the management of gases, that fruit is dead on arrival,” he added.
Kakuzi is a listed Kenyan agricultural firm buying and selling on each the Nairobi and London Stock Exchange. It is without doubt one of the largest producers and exporters of avocado from Kenya with 1,200 hectares of avocados within the floor, predominantly Hass avocados. 60 to 70 p.c of Kakuzi’s revenue is derived from its Avocado enterprise.
“Anecdotally,” Flowers knowledgeable, “about half of the fruit that was exported out of Kenya last year was thrown in the bin.”
The largest logistics problem for avocados has to do with its perishability.
For occasion, Martin Ochien’g, Group Managing Director & CEO, Sasini, factors out that avocado follows a really strict timeline and if there are any delays, high quality is affected.
“Between harvesting and eating, avocado has about 40 days. 10 days to get it from the orchards to the packhouse and 30 days to move it from our packhouse to the shelf. Once we put it on the refrigerated containers, we’ve got about 28 to 30 days to get it onto the shelf and then it starts ripening,” he stated.
Founded in 1952, Sasini is listed on the Nairobi Securities Exchange and is one among East Africa’s largest agricultural companies that grows and exports tea, espresso, macadamia, and avocados. The firm primarily sends avocados to European markets in Holland, Germany, France, the UK and Spain.
The Red Sea disaster is affecting not solely the transit time but in addition the freight value of sending avocados from Kenya to Europe. Even although there are not any secure charges and it depends upon cargo, time and vacation spot, Ochien’g knowledgeable us that the freight charges have nearly doubled from regular ranges.
“A container from Mombasa to Europe pre-Covid-19 pandemic was between $1,500 and $2,000. With the pandemic, that went to about $2,000 to $3,000. After the pandemic, it normalised to about $2,000 to $2,200. With the Suez Canal closed, it’s $3,000 to send a container to Europe,” he stated.
Ochien’g additionally confirmed that their volumes have gone down because of the closure of the Suez Canal.
“We’ve been very selective where we’re exporting because we don’t want to export just for the sake of exporting and losing money. Also, where we used to export a lot of volumes, now we have to be careful because we have to make sure that the fruit arrives in acceptable conditions,” he stated.
Ochien’g additionally famous that they’ve adopted a mannequin the place half the fruit they export is from their very own orchards and the opposite half from small-scale farmers.
“So, we can play around with volumes. When we need a lot of fruit, we go to growers. When we need less fruit, we just use our fruit from our orchards,” he added.
If we will crack these markets, it will likely be a superb growth. The demand in Europe may be very excessive, however the dangers of getting fruit to Europe are additionally very excessive.
Martin Ochien’g, Sasini
How about different markets?
The Red Sea challenge is a pure geopolitical disaster within the Middle East. Neither the East African governments nor the transport strains can do something about it, and thus, the European market is in a difficult-to-reach zone for Kenyan avocados. Here comes the query: why don’t you’re taking the fruits to the East?
In reality, Harm-Jan Mostert, Commercial Director Perishables, DB Schenker, experiences that the Kenyan avocado trade is diversifying its enterprise each when it comes to markets and mode of transport.
He famous that the Red Sea disaster is pushing exporters extra to air freight. “However,” he stated, “not many customers are willing to pay for air freight because the rates are way higher than sea freight.”
“Airlines prefer flowers over vegetables or fruits, making it harder to secure air freight capacity for avocados,” he added.
Europe is by far the largest marketplace for Kenyan avocados.
As Flowers of Kakuzi places it, “There is no way that any of the other markets can compete either in price or volume that they can take.”
According to him, Europe can take up about 700 container masses or 17 million kilos of avocado in per week.
The Middle East and China are the 2 viable choices in entrance of Kenyan avocado exporters however each these markets include their very own challenges.
“The Middle East can take a lot of fruit, but the prices are so low that there’s no business,” stated Flowers.
He additionally identified that China is a rising market however not at a really quick price. It has a 1.4 billion inhabitants however the consumption stage may be very low. But training is occurring.
Ochien’g known as the dependency of Kenyan avocados on European markets a problem.
“There’s a need for us, not just as Sasini, but as Kenya as well, to look at other markets,” he stated.
He knowledgeable that Sasini has already made inroads into the Chinese market, and is planning to enter the Indian market this season whereas additionally exploring the Middle East markets equivalent to Qatar, UAE and Saudi Arabia. He additionally confirmed the value sensitivity of avocados in Gulf international locations and talked about the problem with totally different protocols in China.
He added, “If we can crack those markets, it will be a good expansion. The demand in Europe is very high, but the risks of getting fruit to Europe are also very high.”
But bear in mind Kenya shouldn’t be the one nation that’s making an attempt to promote their avocado in new markets. For occasion, Peru is competing with Kenya for the Chinese market they usually upped their sport final 12 months.
From an East African perspective, the Peruvians can now outcompete us in China.
Christopher Flowers, Kakuzi
Latin American competitors
“Up until last year, Peru could land avocado into China at about 45 to 50 days and so it was right on the edge of what was technically feasible,” knowledgeable Flowers of Kakuzi.
In November 2024, throughout his Latin American tour, Chinese President Xi Jinping inaugurated the Port of Chancay, a newly developed deep-water port in Chancay, Peru within the Pacific. This $3.5 billion challenge is a three way partnership between China’s state-owned COSCO Shipping Ports, holding a 60 p.c stake, and Peru’s Volcan Mining Company, which owns the remaining 40 p.c.
According to Flowers, the port can take fruits from Chile, Peru, Colombia, and Bolivia, scale back the turnaround time and transfer them to China in about 30 days or much less.
“So they’ve taken about 20 days off their transit times by spending a huge amount of money in logistics,” he stated.
“From an East African perspective, the Peruvians can now outcompete us in China,” stated Flowers.
He additionally identified that the competitors isn’t just with the origin but in addition with the market window. In reality, Kenya and East Africa have comparatively shorter market home windows in comparison with their Latin American counterparts however it’s forward of their season.
Ochien’g of Sasini identified that Kenya has a particular window wherein it’s the one one which provides avocado to Europe along with South Africa due to the seasonality of the areas.
“So we try to get into Europe just before South Americans, Peru, Mexico and Colombia come in because they have higher volumes and attract lower prices,” he stated.
The earlier season can also be a bonus for Kenya because the avocado market is affected by international manufacturing and stream.
“Peru is very big in avocados; they flood the European market, and the Kenyans suffer from that. So when the Peruvians are in their peak season in the European market, the Kenyans stay out because the avocado price comes down heavily,” stated Christo van der Meer, Manager Seafreight Perishables at Kuehne+Nagel East Africa.
“For instance,” he added, “in June last year, no Kenyan exporter shipped avocados to Europe because the Peruvians were on the market.”
The Red Sea disaster has made it worse for Kenyans. Mostert identified that Latin America is gaining market share in Europe and North America resulting from these logistical points.
Kenya is a really promising nation on the subject of the export of agricultural merchandise. But it isn’t that large that it is rather necessary for container carriers.
Christo van der Meer, Kuehne+Nagel
Need to turn into large, unfold out
Flowers of Kakuzi emphasised the significance of Kenya turning into large and spreading out within the avocado enterprise. Talking concerning the competitors, he famous that the standard of avocados comes down to 2 issues: the unique high quality with which the fruit is put within the container and the transit time.
“If you’re putting rubbish fruit in a carton, it’s not going to get any better on transit. Then it’s about the transit time. Are you managing the controlled atmosphere conditions in that transit time? And how quick is that transit time,” he stated.
Kenya has so many perishable merchandise, so why don’t container carriers simply go instantly from Mombasa to Europe? The onerous reality is that Kenya enjoys much less bargaining energy within the freight market.
“East Africa doesn’t have the volume of fruit that Peru has. The number of ships that operate and the capacity offered are sized to the volume being exported,” Flower stated.
“So we’ve got to be big enough, and spread enough over the market weeks to be able to be relevant to retail players,” Flowers added.
“Kenya is a very promising country when it comes to the export of agricultural products. But it is not that big that it is very important for container carriers,” says van der Meer.
He additionally emphasised the necessity for the Kenyan avocado enterprise to turn into large to draw extra capability and necessary sufficient to achieve extra bargaining energy within the freight market.
Build extra packhouses near manufacturing centres reasonably than in Nairobi. This may also help extra small and medium-scale growers entry the chilly chain, permitting them to take part within the international provide chain.
Kenneth Oluoch, Knvella Fresh Exporters.
Let’s give attention to infrastructure
Kenyan avocados not solely must unfold outwards but in addition inwards. For occasion, Kenneth Oluoch, Director of Nairobi-based Knvella Fresh Exporters, identified the necessity to develop the avocado manufacturing centres from the present focus within the central Kenyan area to different geographies in Kenya to be sure that the fruit from the nation is obtainable within the international market all year long.
“Out of eight provinces in Kenya, the two provinces of Central and Rift Valley produce the most avocados. If the government can support and mobilise, other provinces can produce avocados and have good volume and quality fruit. That will give us the all-year-round season,” he stated.
He gave the instance of Tanzania as he additionally works with Tanzanian farmers and exports avocados from the nation which maintains an all-year-round avocado season.
“They have a very long season of avocado because they grow the fruit in different regions of the country. So if the season is off in one region, the other region will come up,” he stated. Even although the volumes are low, he predicts that Tanzania will do higher within the subsequent 5 years.
Oluoch additionally emphasises the significance of constructing extra packhouses and consolidation centres shut to those manufacturing centres reasonably than in Nairobi, the place they’re at the moment concentrated. This may also help extra small —and medium-scale growers entry the chilly chain, which is critical for sustaining the optimum shelf lifetime of avocados, and permit them to take part within the international provide chain.
van der Meer supported this argument by declaring chilly storage and pre-cooling capability as the largest problem for Kenyan avocado shippers notably in the course of the peak season.
“There have been quite a few successful Kenyan shippers before the Red Sea situation, because the transit time was relatively short, 25 to 28 days to Rotterdam. But when it comes to longer transit times or delays, the starting quality of the fruit has to be impeccable. If you properly pre-cool the avocados, making sure that they are loaded inside the container at five degrees Celsius, you start off quite well. But when it’s peak season, we have a lot of avocados coming in, and packing a lot of avocados is a challenge,” he defined.
Stakeholders throughout the availability chain additionally verify that there are optimistic indicators of Kenyan avocados turning into large, and unfold out and infrastructure getting constructed near avocado farms in Kenya.
For occasion, Raghav Gandhi, Chief Executive Officer of Africa Logistics Properties (ALP), knowledgeable us that ALP is at the moment in dialogue with an avocado grower in Naivasha to create an 18,000 sq ft packhouse in a brand new land parcel for them.
Gandhi famous that the occasion is considerably growing its enterprise, shifting into exports, and desires a devoted facility for itself.
“They have an operation but not as sizable as they are planning to put together. So this would increase the scale of their business substantially. Right now, they have a smaller operation in a small facility in a wider park,” he stated.
ALP and Gandhi are actively collaborating within the design of the packhouse. “How the supply chain would flow through the packhouse. Where are they going to do the receiving, and when are they going to do the sorting? Where are they going to do the packaging, etc,” he added.
“The company has approached us and this is a commercial arrangement specifically for this party. For us to do that on a speculative basis in places outside Nairobi is a very different proposition because it takes a lot more risk. We can build this because we have mitigated the risk significantly by having a pre-lease arrangement,” he stated.
The Kenyan avocado trade is at a crossroads. The challenges posed by geopolitical disruptions and competitors from Latin America are important, however in addition they current alternatives for progress and diversification. By increasing manufacturing capability, investing in infrastructure, and exploring new markets, Kenyan avocado producers can overcome these challenges and set up themselves as key gamers within the international avocado commerce.
This function was initially revealed in the January – February 2025 concern of Logistics Update Africa.
