FRESH FARM PRODUCE

Speed up bilateral talks with UK over fresh farm produce, industry players urge state

Kenya currently enjoys zero per cent duty on exports to UK.

In Summary
  • With Brexit nearing its inception, the players are worried that they might be locked out of bilateral agreements signed and be forced to pay 8% excise duty.
  • The UK market is the second most important market for Kenyan players in the horticultural industry after the EU, from which the UK is exiting.
Kenya Flowers Council CEO Clement Tutezi, Kenya Airports Authority general manager Harrison Machio, KAA commercial manager in charge of cargo Jacob Bukwa, Fresh Produce Export Association of Kenya CEO Hosea Machuki and Fresh Produce Consortium of Kenya CEO Okisegere Ojepat at Voyager Hotel in Mombasa on Friday.
HEADS TOGETHER Kenya Flowers Council CEO Clement Tutezi, Kenya Airports Authority general manager Harrison Machio, KAA commercial manager in charge of cargo Jacob Bukwa, Fresh Produce Export Association of Kenya CEO Hosea Machuki and Fresh Produce Consortium of Kenya CEO Okisegere Ojepat at Voyager Hotel in Mombasa on Friday.
Image: BRIAN OTIENO

Fresh produce industry players in Kenya have expressed concern over the slow pace of negotiations between the government and the UK over trade agreements.

With Brexit nearing its inception, the players are worried that they might be locked out of bilateral agreements signed and be forced to pay an eight per cent excise duty for any produce they export to the UK.

“We want to see much more movement than we have seen as far as Kenya entering a bilateral or having an agreement with the UK so that we can continue exporting,” said Kenya Flower Council CEO Clement Tulezi.

Tulezi spoke after a meeting of industry players, including Fresh Produce Exporters Association of Kenya, Fresh Produce Consortium of Kenya, Horticultural Crops Directorate, among others, in Mombasa on Friday.

The prospects of Brexit is becoming more of a reality with the January 1 deadline fast approaching.

Tulezi said a day is too long for the players in the industry that has employed at least 350,000 people in the country.

Though horticulture is dominated by the production of cut flowers, fresh produce represents a significant source of foreign exchange, with exports generating $330 million  (Sh33.6 billion) in 2017, out of a total of $1.15 billion ( Sh117.3 trillion) for horticultural sales overall.

“For us, we are affected probably much more than anyone and therefore just a clarity from the government on these negotiations that are going on will give us a bit of comfort,” said Tulezi.

 

“We just want to have that surety that come January 1 we will continue exporting into the UK much more competitively than the rest of our competitors,” said Tulezi.

There are indications the UK wants to impose an eight per cent duty on the flower and other fresh produce imports into their country.

This will make the Kenyan fresh produce uncompetitive given that competitors from South America including Colombia, and Africa, already have agreements with the UK at zero per cent and will continue having access to the UK market on different terms.

“This is something we want to flag to the government so that it is put as a priority,” said Tulezi.

The UK market is the second most important market for Kenyan players in the horticultural industry after the EU, from which the UK is exiting.

“We have to maintain this market at all costs,” said Tulezi.

Currently, Kenya is on a duty free quarter on exports to the EU, which by extension means they export products to the UK, which is in the process of delinking itself from the EU.

However, this is going to change come January 1 next year if an agreement is not signed.

The eight per cent duty is based on the value of the produce.

The players said the eight per cent duty will be too much for them and they cannot pass that cost to the consumers.

“If we do that, it will mean that the consumer will have to pay more for our produce yet they have alternatives. They will just ditch our products,” said Tulezi.

The CEO said as Kenya negotiates with the UK, they hope that the EU will also have a deal with the UK.

“If that does not happen, any of our produce that goes through the EU, for example in Amsterdam, we will also be subjected to an eight per cent duty.

“So, it is a dual interest that we have both for us to have a direct agreement with the UK and the EU have an agreement with the UK,” said Tulezi.