The Red Sea crisis has made things really difficult for East African avocado growers and exporters, Olumide Bolumole, CCO of exporter association Fluna Africa, states: "In 2024, East African avocado growers and exporters faced unprecedented challenges due to the Red Sea crisis, prompting Kenyan and Tanzanian exporters to resort to desperate measures to stay afloat. These measures included venturing into budget-oriented markets with difficult payment terms, traditionally difficult absorb for SMEs, and exploring new territories such as India, China, and Gulf Cooperation Council countries."
Olumide Bolumole, CCO, and Kuorkor Dzani, CFO
Transit times to Turkish and European destinations have doubled, which caused issues not only with compromised quality, but also prices, Bolumole explains. "The Red Sea crisis has severely disrupted the European market. This resulted in supply shortages, soaring prices, and compromised quality, as suppliers attempted to extend their seasons to minimise supply gaps by shipping produce in less-than-optimal conditions. Additionally, routes to destinations such as Black Sea ports and Turkey have become both unreliable and unstable, with transit times more than doubling. The latter soared from 18-20 days to 40-45 days at best, as a result of pivoting to the Cape route. The alternative land bridge route via Dammam and Port King Abdulah has unfortunately proven prohibitively expensive."
Bolumole says that this situation has been specifically problematic for small-scale farmers, who are at risk of losing the business due to inadequate financing: "70% of the Kenyan avocado production is estimated to come from small-scale farmers with less than two hectares of land. As such, the crisis has dealt a heavy blow to their operations. Short-term impacts include decreased demand and thus income due to the loss of the European market, which previously accounted for 70% of Kenyan fruit exports. Looking ahead, we fear that the crisis might lead many exporters with inadequate financing to sell on credit or on open prices to GCC countries, thereby leading to potential business failures. This is particularly concerning as exporters serve as the primary demand channel for these farmers."
This is not to say it has all been doom and gloom. Bolumole emphasizes that many exporters have experimented or innovated to make things work. "Despite the current difficulties, East African avocado exporters have demonstrated resilience and adaptability, which is why we remain optimistic about learnings and growth to come. For instance, some exporters opted to ship fruit in extended transit times of 50+ days at the beginning of the crisis, which led to more than acceptable results. This experiment demonstrated that when harvested under the right conditions, with additional care post-harvest and when using the right equipment, avocados have the potential to endure long transits without compromising quality."
As a result, the future for East African avocado growers and exporters could be brighter, with newer strategies and goals. "Some consequences of the current crisis, such as the need to diversify into new markets and test the resilience of avocados in extended transit times, may lead to more strategic approaches in the future. Additionally, new partnerships forged during this time will also likely strengthen the industry. As the season progresses and European demand remains unmet by other sources, more European companies may turn to East African suppliers. Positive experiences and heightened demand could encourage additional importers to explore partnerships in the region, providing a silver lining amidst the ongoing crisis," Bolumole concludes.
For more information:
Olumide Bolumole
Fluna Africa
African Office +234 806 273 5133
European Office +31 (0) 6 400 62180
US Office +1 (865) 549 9788
email: [email protected]
www.fluna.co