Delays at Port Spark Fears of Price Increase and Fertiliser Shortage
The government has directed that fertiliser imports be expeditiously inspected at the port of Mombasa to alleviate shortage that has seen an increase in prices of the crucial farm input.
Public Service Deputy Head and Multi- Agency Taskforce on Enforcement of Standards Chairman Wanyama Musiambo, said every tested consignment that meets Kenya Bureau of Standards (KEBS) requirements be released forthwith. Mr. Musiambo also directed the Kenya Flower Council (KFC) to immediately inform his office of any unnecessary delays to facilitate decisive action against officials frustrating the government’s efforts to rid Kenya of counterfeit and substandard goods.
In an interview, KFC chief executive Mr. Clement Tulezi decried continued delay in releasing approved consignments that were incurring hefty storage charges. “We are the third highest foreign earner after tea and tourism as well as employs the highest number of Kenyans at over 300,000. Denying us access to imported fertiliser is akin to stifling our continued growth,” he said.
Mr. Tulezi, accompanied by KFC members Mr. Patrick Mbugua (Wildfire Flowers), Tom Ochieng (Penta Flowers), Agricultural Employers Association (AEA) director Biraj Williams and AEA Chief executive Wesley Siele met Mr. Musiambo where they expressed their displeasure at the ongoing re-inspection.
“We are doing everything possible to support our members in unlocking the situation as soon as possible to avert total collapse of the industry,” said KFC chief executive mr. Clement Tulezi.
KFC said it appreciate the controls Kebs is putting in place to ensure quality and conformity to standards, but the process should be quick and facilitative to the industry.
“Flower farmers and other bulk importers of fertiliser are being made to pay twice for inspection since Kebs requires each consignment to be inspection at the country of origin by Kebs-appointed inspectors before it is shipped to Kenya,” he observed.
Mr Tulezi said flower firms were facing a bleak future since storage, re-inspection and increased transportation charges risked making Kenya’s retail prices at the global market uncompetitive.
Mr Wanyama directed that fertilisers that marginally fail the test be re-examined within the shortest time possible and flower council be provided with daily updates on goings on at Mombasa port.
Wanyama said inefficiencies within essential government institutions, including KEBS had necessitated the scrutiny adding that some regulatory institutions were ‘nonetheless’ over-reacting.
Price Increase
In recent months, fertiliser prices have increased by 21.6 per cent following the shortage blamed on stringent vetting of imports and clearance delays at Mombasa Port.
Speaking to Floriculture, flower grower and exporter Oserian Development Company raised alarm over the shortage.
Oserian said the delays are grinding company’s operations to a near halt with devastating effects.
“The flower industry has this year already been hit by bad weather, pest and disease pressure, high cost of production as a result of increased fuel cost and fluctuating markets. This bottleneck within our borders will only make things worse,” said Mary Kinyua, director of human resources and administration at Oserian.
Initially KEBS certified the quality of fertilisers in the country of origin before shipment and the re-inspection of all consignments at the port of entry as it pursues to tame proliferation of counterfeits is causing delays.
The new clearing process is now taking up to two months before the release of consignments.
Ms Kinyua said fertiliser suppliers are incurring up to Sh2 million daily in demurrage which they are passing to them, further pushing the cost of producing flowers up.
Oserian is predicting a dip in yields and increase in flower prices, which it said will be the case among other growers as they seek to compensate their margins, making the country’s flowers expensive at the global market.
Kenya Flower Council (KFC) chief executive Clement Tulezi said importers are charging Sh65,000 a tonne compared to the usual Sh25,000 before the government started pre-inspection last June.
“The situation is fast getting out of hand since Kenya lacks the capacity to test for the nitrate-based fertilisers. This has seen all nitrate-based consignments fail the re-examination test and have been held at Mombasa port awaiting resolution of the problem,” he said.
Risk Competitiveness
Kitale flower and fruits farmer Bob Anderson said the delay had adversely affected commercial operations, with port and storage demurrage charges as well as the newly introduced 20 per cent tax on demurrage charges being heaped on fertiliser importers.
“The government’s move to block entry of fertiliser is a disincentive that has reversed gains made in Kenya’s third highest foreign exchange earner. Our farmers must increase their retail prices further, making Kenya’s produce unaffordable,” said the KFC boss.
Mr Tulezi said Kenya’s 40 per cent competitive edge in the global flower market risked being wiped away by bureaucratic processes at the port that hampered smooth flow of fertiliser through the port for onward transportation to the farms.
“Kenya is also tarnishing its reputation as a fertiliser business partner since no importer pays for their consignment upon arrival as it was before but have to wait for re-testing and pay upon clearance. This means future direct exports of fertiliser from manufacturers to Kenya could be minimal making the commodity expensive,” said Mr. Tulezi.