2010-04-19
NAIVASHA, Kenya (Reuters) - Kenyan flower farmer Jack Kneppers was forced on Monday to throw 6.5 tonnes of his exquisite roses into a compost pit after flights headed for Europe were cancelled because of the ash cloud.

Kenya's horticulture industry has already lost $12 million to the European airspace closure and it will take several weeks to recover even if flights resume now, its association of exporters said.

Kneppers' farm by picturesque Lake Naivasha in southwest Kenya produces 11 varieties of pristine roses worth tens of thousands of dollars every day.

"We have to throw them into big pits and turn them into compost," Kneppers said, standing in front of rows of boxes full of flowers that he fears will meet the same fate.

"Every day this happens it will cost us $35,000, more as we approach European mothers' day ... If you want to know what is being lost across the local industry, times that by sixty."

Horticultural exports are the leading hard currency earner in east Africa's largest economy, raking in 71.6 billion shillings last year. The sector provides thousands of jobs in a country with a high unemployment rate.

Flowers accounted for more than half of horticulture export earnings in 2009.

"It is bad. We have lost $3 million a night so that is a total of about $12 million as of last night," Stephen Mbithi, the head of the Fresh Producers Exporters Association of Kenya (FPEAK) told Reuters from his Nairobi office.

SPANISH CORRIDOR

Mbithi said the country flies out 1,000 tonnes of fruit and vegetables every night at this time of the year and only about 100 tonnes departed on Monday morning, destined for Spain.

"We want to see if we can open a corridor into Spain then we can send everything from Spain straight to Germany, Netherlands Belgium and everywhere we sell," he said.

Foreign exchange traders said the Kenyan shilling was likely to remain under pressure against the dollar as the flight ban was bound to hit hard currency inflows.

"This week there will be further losses whatever happens, even if cargo services resume, because there might be too much supply at once when the smoke stops," Mbithi said.

"If everything goes back to normal, we expect that within two-three weeks, then we will go back to normal, that is prices and everything," he said. "So it is going to be a major short-term loss."

Mbithi said a cargo flight was scheduled to take off Monday evening, but 10 flights every day were required to clear routine stock, not including the backlog.

Kenya Airways' Managing Director Titus Naikuni told a news conference the carrier was losing $1 million each day from cancelling flights to London, Amsterdam and Paris.

Neighbouring Ethiopia's smaller horticulture business, which earned $150 million in 2009, was also hit by the disruption.

"During the last six days we have lost 700 tonness of exports, equivalent to 1.75 million euros," Haileselassie Tekie, director general of the Ethiopian Horticultural Development Agency, told reporters.

"The horticulture industry has been seriously affected. Over 80 percent of our produce is marketed in Europe."