Kenyan farmers to supply China’s avocado market

Murang’a Governor Mwangi wa Iria during the launch of the Murang’a Avocado Farmers Union.

It is not once that Kenyan have built an excitement around an investment, with disastrous consequences.

There was the quail business, the stock market boom, the pyramid schemes and many more. And now, there is the avocado craze. Will it end the same way? The new deal, to export avocado to China, appears to be the catalyst of mass growing of the crop, with exports of frozen ripe fruits set to start immediately before China later allows Kenya to export unripe, green avocado fruits.

The good news is that it is not the first time Kenya is exporting avocados.

Europe has traditionally been Kenya’s main avocado market. Indeed, a walk into a greens section of most supermarkets in European towns is very satisfying when one sees ‘Produce of Kenya’ labelled avocados on display.

South Africa and Mauritius too have been on and off markets for Kenya’s avocados.

Again, avocado, even the Hass variety favored by the export market is not new to farmers here.

Growing up in 80s, elite farmers in Mt. Kenya region usually had Hass avocado trees in their farms. While the less knowledgeable villagers only grew the indigenous types, which were often fed to the dogs because of overproduction and low market demand, the elite farmers protected theirs jealously and pick-up trucks would flock their homes to take the harvest to ‘Nairobi’.

Indeed, even before the China deal, national statistics for the year 2018 show a surge in export of avocados.

The statistics, captured in the Economic Survey 2019, show that the value of horticultural exports increased by 9.6 percent to Sh124.3 billion and accounted for 22.9 percent of total domestic exports in 2018. 

“The growth was mainly driven by increases in exports of cut flowers and avocados, which more than doubled in 2018,” notes the survey prepared by the Kenya National Bureau of Statistics.

The frenzy Avocado farming, and the market, has like a dormant volcano, which is now erupting, hopefully shedding fertile ashes to over cultivated land.

Nyeri Governor Kahiga Mutahi gives free avocado seedlings to farmers. The same has been done in Embu, Kirinyaga, Murang’a, Nyandarua, Kiambu and Meru.

Often done on very small scale, it was not until 2014 that the current avocado revolution started, thanks to an initiative of Murang’a Governor Mwangi wa Iria to turn it into a cash crop.

The fruit that fetched Sh3 five years ago is now fetching Sh9 plus an annual bonus at Kakuzi Limited, which has emerged as one of the largest buyers of avocados from farmers in Mt. Kenya.

But farmers say this is a child play because the fruit is fetching much more than what Kakuzi is offering, fueling their ambitions to get to the international market directly. “We are waiting for a license from Kephis so that we can start planning our own direct international marketing,” said Amos Gichanga, the Chairman of the Kirinyaga Avocado Growers Cooperative Society. Gichanga says farmers know the market and where they do not, they are ready for local and international partnerships as well as employing experts to ensure that they give the global market with what it needs.

“For instance, through collaboration with Kirinyaga County government, we are employing experts, with knowledge of avocado global market dynamics to guide us to meet the standards that the international market requires,” he said in an interview.

His sentiments and the organization into a cooperative is a replica of what is happening and bound to in other counties like Murang’a, Kiambu, Embu, Meru and Nyeri among others that are seeking to tap the new green gold.

Among the conditions given by China is that exports should be of ripe avocados, which have been frozen at minus (-) 30 degrees centigrade after peeling, according to the conditions seen by Mt. Kenya Star.

The same should be transported to China when frozen at -18 degrees centigrade or below.

The agreement also requires that this peeling, packing and freezing should be done at pack houses that have been approved by Kenya Plant Health Inspectorate Service (Kephis).

The Chinese say these conditions are necessary because of the challenge of fruit flies in Kenya’s avocados, a reason South Africa and Mauritius had also banned the export of Kenya’s fruit.

The conditions will also help to trace back the fruit, a requirement that has become crucial in the international food market. Thika Town MP Patrick Wainaina, who is an exporter of various farm produce to global markets termed the conditions as ‘non-tariff’ barriers.

“China never intended to buy our avocados from day one,” he said. But farmers instead say the conditions are God-send as they will help improve their capacity to export under globally competitive field not only to China but also other world markets.

According to Gichanga, there is a growing interest by farmers’ cooperatives so set up world standard pack houses, with refrigeration and associated facilities at the grassroots level to serve the international market.

“This is an ideal opportunity. It is an advantage because we want to have a packing house in the county. We have people who know how the process of peeling and freezing is done. It is something we can handle,” he said.

He said there are opportunities for partnerships, even with the Chinese, to build capacity to have globally competitive pack houses at counties level. “We have already started forming clusters of 30 people for easier management by our field officers to ensure that we meet all the standards that the Chinese market requires,” he added. So far, hundreds of thousands of farmers in Mt. Kenya region and parts of the Rift Valley have planted avocado fruits thanks to concerted efforts of private sector organizations, county government and national government agencies.

Companies like Amiran Kenya have brought in improved seedlings from Israel for the local market. The market for grafted seedlings is also booming. It is not by fluke that all these companies, county governments and individuals are investing in avocado. The reality of the international market is to be found in statistics which offer Kenya unrivalled opportunities to become the world’s top producer of the crop. The opportunity According to Roan Yariv, the Business Development Manager of Amiran Kenya, and the biggest advantage with Kenya is that its climate is suitable for avocado growing as the crop requires areas with at least 1,000mm of rainfall.

“Where rainfall is not adequate, we advise Kenya farmers to use irrigation solutions which are widely available in the local market. We have many buyers in Europe whom we can connect the Kenyan farmers to,” he said in an earlier interview.

Kenya is the 7th biggest producer of avocados in the world with an average annual production of 191,000 tonnes per year as of 2017, compared to Mexico, the first in the world with, 1.5 million tonnes per year, according to Food and Agriculture Organization (FAO).

“Kenya can be the leading producer and export if it can address the challenge of increasing irrigation to ensure better yield and uniformity of avocado fruits, increase avocado acreage under production, and improve the quality of avocado fruits by planting the right variety,” said Yariv.

A research study conducted by Transparency Market Research on global avocado market dynamics for the year 2018 to 2026 shows that global revenue generated from the avocado market is estimated to be valued at US$ 13,641 million or about Sh1.4 trillion as of the year ending December 2018.

This revenue is expected to increase at a compound annual growth rate of 5.9 percent to 2026, meaning that by the end of that year, the market will possibly attain a value worth Sh2.2 trillion.

Key drivers of demand for avocado include increasing preference for healthy food.

“The health benefits of avocado fruit are staged as the major marketing strategy for the promotion of avocado fruits as well as an extensive range of avocado-based products,” notes the research paper. “Over the course of study, findings direct a higher growth rate for the processed avocado products,” it adds.

Besides the fruit, avocado oil, which is extracted directly from the fruit and which is an alternative income stream for Kenya’s farmers, has a rising global demand.

A research study by Future Market Insights shows the estimated value for global avocado oil market value in 2019 will reach Sh96 billion with a compound annual growth rate of 5 percent over 20192029. “Declining demand for fatty oils owing to potential health hazards is fostering popularity of healthy oils, thereby favoring avocado oil sales,” notes the research.

“Hass variety will continue to be the top-selling variety of avocado oil,” it adds.  Avocado oil is used in the manufacture of medicine, beauty products and consumer goods like cooking oil. Chinese market Although Kenya is excited by the Chinese market, it is not the world’s largest importer.

It is actually the 7th, data shows. The top three include the United States, Netherlands and France followed by Germany, Canada and the United Kingdom what is exciting about China however is that it is one of the fastest growing markets with a huge population of 1.4 billion people, with the annual demand for avocados almost doubling every year.

Data shows that while China imported two tons of avocados in 2010, this jumped many times to more than 30,000 tons by 2017. It has since grown. Research so far shows China’s growing health-conscious middle class is fueling a rapid boom in the demand for avocado, which is known as a “butter fruit” there. “Avocado fruit is becoming a status symbol among the 100 million Chinese middle class.

Chinese middle class is willing to pay more for the product,” said British-based University of Huddersfield lecturer David Harvey.

“So avocado demand in China is being doubly driven, not only by their promised health benefits but equally by their newness, exclusivity and symbolic, aspirational value to the burgeoning middle class.”