Chilli pepper and other key vegetable exporters are worried about rising freight charges by international airlines – a phenomenon that is deterring exports to the EU and US markets amid increasing demand for the commodities.
Due to their perishability, fruit and vegetables are best transported by air per international best practices and standards.
But current freight charges for a kilogramme of chilli pepper, shallots, okra and other vegetables have gone up by more than 50 percent to US$1.90 and US$2 for others.
Currently, a tonne of chilli pepper transported by international cargo to the EU costs the local exporter not less than US$2,000, with freight charges to the UK higher than that.
With the COVID-19 pandemic contributing to the situation, the increases have been made worse by existing global fuel prices and the dollar’s exchange rate.
Alongside tomato and onion, chilli ranks as one of Ghana’s three most important vegetable crops, in terms of hectarage and crop value with significant potential for exports revenue.
Despite its prospects, local farmers are able to meet less than 40 percent of the achievable yields of chilli production per annum.
These challenges, according to the Vegetable Producers and Exporters Association of Ghana (VEPEAG), have been contributing to low scale production – although there is available capacity to meet external demands.
VEPEAG’s president, Dr. Felix Kamassah, told B&FT that government must help the sector by acquiring a national cargo-plane to rescue the industry and bring in the required income by harnessing available opportunities which the sector offers.
Ghana’s fruit and vegetables industry, according to the Ghana Export Promotion Authority (GEPA), is worth more than US$100million in exports each year.
But Dr. Kamassah maintains that the sector is currently losing almost 40 percent of this revenue to high freight charges.
Comparatively, the Kenyan government – through Kenya Airways – has a national cargo plane for its horticultural industry which supply fruits and vegetables from that country to the EU and US markets.
Taking lessons from Kenya, the Ghanaian government can also implement the same intervention either through private partnerships or nationally subsidized cargo transport, Dr. Kamassah said, adding: “With availability of subsidized cargo, the industry can produce about 20 tonnes of chilli per week to meet rising demands in the EU”.
NEDS and the quest to raise US$25.3billion by 2029
Through the National Export Development Strategy (NEDS), GEPA is optimistic of consolidating the gains of key sectors including the horticulture industry to develop the non-traditional export (NTE) sector’s potential through industrialization and intense collaboration between the private sector and government.
The 10-year structural transformation embedded in the NEDS is targetted to earn the country US$25.3billion in 2029 from NTEs, which is a US$22.5billion increase from the 2020 figures.
Inclusively, Dr. Kamassah argues that the horticultural sector when given the needed focus can at least contribute a significant chunk of the NTE target by 2029.
