Vegetable and fruit exporters lose $1.6 million to COVID-19

Ghanaian vegetable and fruit exporters are unable to send consignments to their buyers in Europe and other international markets due to lack of demand arising from the outbreak of the novel coronavirus disease.

The situation has led to the exporters losing produce worth an estimated US$1.6 million along the value chain.

The produce ranges from okros, peppers (chillies), pineapples, bananas and citrus fruit to mangoes.

Negative impact

According to the Vegetable Producers and Exporters Association of Ghana (VEPEAG) about 200 vegetable and fruit exporters had so far lost a minimum of $1.6 million to post-harvest losses (PHL) from March this year when most foreign countries implemented restrictions on human movement.

The president of VEPEAG, Felix Kamassah, said the situation was having a negative impact on the industry.

Since the virus was noticed in Europe, for instance, he said, vegetable and fruit exporters had been hard hit, with the estimated financial cost differing from one exporting firm to another.

That, he said, was because buyers who were mostly in Europe ceased their intake of supply due to the implementation of restrictions on human movement.

“Although goods were allowed to move across during the lockdown period, most buyers overseas stopped the supply of vegetables and fruit because the demand for domestic and industrial consumption was very low.

“The irony of the situation is that based on the contract we had with our buyers, we have already invested our capital in the produce,” he said.

The development, he said, had led to the exporters losing their capital to the tune of $1.6 million because the commodities got rotten as they could not get to their destinations.

Hope for a rise in demand

Felix Kamassah said most of the exportable commodities were not preferred by local consumers and, therefore, could not be rechannelled entirely onto the Ghanaian market as international demand reduced.

“Last week, for instance, one of our members reported that his company was supposed to ship a consignment to France, but his buyer said he should hold on with the consignment, even though he had already completed packaging and had made the consignment ready for export,” he said.

Kamassah said exporters expressed the hope that demand for vegetables and fruit on the international market would soon start rising due to the gradual easing of the restrictions on human activities across the world.

“Because about $1.6 million of our working capital had been lost to post-harvest losses, it would be difficult for us to meet demand when it starts increasing again,” he said.

Industry-specific package

He, therefore, called on the government to set up an industry-specific stimulus package to provide soft loans to support the horticulture industry, especially vegetables and fruit production.

“The government must also focus on developing industry-specific stimulus package to complement the efforts of businesses in their bid to survive and grow.

“This will ultimately achieve impact, resilience and sustainability of the entire industrial value chain, given the disruptions caused by COVID-19,” he said.

On government’s stimulus package to cushion small and medium scale businesses from the impact of COVID-19, he observed that the disbursement criteria for the special fund did not favour firms operating in the vegetables and fruit industry.

“I applied for the stimulus package for my company but they said my turnover was more than GHC1 million and, therefore, I am not eligible to benefit from the GHC1 billion Coronavirus Alleviation Programme (CAP) business support scheme.

“That is why we are calling for an industry-specific stimulus package to support firms in the export industry,” he said.

Production in Ghana

The production of fruit and vegetables plays a crucial role in the development of the country’s economy.

According to the Ministry of Food and Agriculture (MoFA), fruit production contributed 15.74 per cent of export earnings to the country’s economy in 2015 alone.

The country is endowed with a variety of fruits such as pineapple, mango, banana, citrus, papaya, passion fruit, coconut, among others.

There are opportunities to transform these fruits into value-added products such as juice, dried fruit and concentrates to increase trade for the domestic, regional and export markets.

Data on vegetable exports from the Ghana Export Promotion Authority (GEPA) also showed negative export fluctuations in the sector for the last decade.

From $1.75 million in 2009, foreign exchange derived from vegetable exports rose to $4.35 million in 2011, before declining to $608,304 in 2016.

However, the industry, which yielded approximately $831,751 in 2017 export earnings, dropped to $669,208 in 2018.