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Kenyan shilling fall hits exports, puts air cargo at risk, and out of reach

AIR cargo from East Africa to Europe, and the horticultural industry which depends on it, are slowing fast as Kenyan shilling collapses, raising inflation while the Eurozone crisis depresses demand for flying flowers.

The Kenyan shilling has slumped to a historic low of 107 against the dollar from an average of 82.1 in January, making it second worst performing currency in the world after the Belarusian rouble, reports Nairobi's daily the East African.

Said Kenya Flower Council chief Jane Ngige: "Weakening currencies have made it expensive for the industry to import flower inputs and meet freight charges."

When the Kenyan shilling hit a record new low, the Ugandan and Tanzania shilling followed. The slowdown in horticultural exports - which fell to US$145 million in the first two months of this year compared with $716 million in the same period last year - will eat further into this year's earnings.

Operators said freight costs now constitute 40 per cent of the exporters' expenditure. The cost of fertiliser, for example, for Kenya farmers has shot to US$100 per 10-kilogramme pack from $79 over the past four months.

"There's a decline in trader numbers especially to the United Kingdom. Exporters will have to wait for the economy to stabilise before a decent number return," said Michael Muriithi, British Airways World Cargo Area commercial manager for East Africa.

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