KIGALI, 18 January 2021 – Hikes in airfreight charges for the transport of horticulture exports could ruin Rwanda’s competitive edge in the sector, exporters warned Monday..
High air transport tariffs without an increase in the price of the product in our destination markets “has had a negative impact on the horticulture business,” said Robert Rukundo, chair of Horticulture Exporters Association of Rwanda.
The change in air cargo transport pricing started in March 2020 and has led at least one Rwanda-based company, Floris, to suspend the export of bananas.
“A box containing 20 kilograms of banana used to reach Europe at the cost of $54.43 (€45), but it is $72.57 ( €60) currently,” Floris owner, Donatille Nibagwire, told the Kigali-based The New Times newspaper Monday.
“As a result,” she added “we are not exporting banana estimated at five tonnes per week”.
Nibagwire’s company, Floris, specializes in horticulture exports
Besides bananas, Floris exports avocadoes, chilli, and sweet potato leaves to Europe.
Floris still exports other horticulture products, but fear that they will lose their competitive edge compared to exporters from other countries where air cargo charges have not been increased.
The natonal airline, RwandaAir, which used to charge $1.2 per kilogram of flowers in March 2020, currently charges $1.8 a kilogram, up 50 percent.
Ethiopian Airlines has raised its cargo prices for horticulture exports by 57 percent, from $1.4 per kilogram in March 2020 to $2.2 per kilogram currently.
RwandaAir and Ethiopian Airlines are the two biggest providers of cargo air transportation services to the Rwandan horticulture sector.
There seems to be no easy fix to the situation.
The Chief Executive Officer (CEO) of RwandaAir, Yvonne Manzi Makolo, told The New Times that the hike was induced by COVID-19 and increased fees the airliner is charged to handle its cargo in Europe.
“If the airline goes below the $1.8 a kilogram, it will be a major loss for us,” Makolo explained.
Asked why Ethiopian Airlines charges $0.4 more, Makolo explained that RwandaAir receives that amount in subsdies from the Rwandan government.
The Rwandan government and the country’s National Agricultural Export Development Board aim boost revenue from the export of horticulture commodities (flowers, fruits and vegetables) from $28.7 million in 2020 to $130 million by 2024.