Rwandan horticulture exporters have appealed for lower airfreight charges after an increase in the fee charged to transport their fresh produce to foreign markets has adversely affected their profits. This, they say, threatens the development of the country’s horticulture exports.

The increase of the airfreight charges was attributed to the Covid-19 pandemic.

According to exporters, before Covid-19, RwandAir used to charge $1.2 (about Rwf1, 160) per kilogramme, which increased by 50 per cent to $1.8 (about Rwf1, 730) per kilogramme.

Also, they said that Ethiopian Airlines used to charge $1.4 per kilogramme, but the fare rose to $2.2 per kilogramme, representing an increase of over 57 per cent.

The change in air cargo transport pricing started in March when the Covid-19 disrupted the travel and aviation industry, resulting in the suspension of commercial passenger flights.

Both airlines are the main providers of cargo air transportation services in the country currently.

Donatille Nibagwire, the owner of Floris – a company engaged in horticulture exports – told The New Times that this issue is making Rwandan horticulture exporters lose competitiveness at the international markets compared to regional exporters whose airfreight charges did not increase.

The company exports bananas, avocadoes, chilli, and sweet potato leaves to Europe, but Nibagwire said it halted the exportation of bananas as a result of high airfreight fares.

“A box containing 20 kilogrammes of banana used to reach Europe at the cost of €45 (over Rwf52, 000), but it is €60 (over Rwf70, 000) currently. As a result, we are not exporting bananas estimated at five tonnes per week,” she said.

Robert Rukundo, the Chairman of Horticulture Exporters Association of Rwanda told The New Times that being subjected to high air transport tariffs yet the prices for the final products taken to the market have not increased has had a negative impact on the horticulture business.

He said that the increase of the airfreight charges by airlines during Covid-19 induced lockdown was understandable as passenger air transport was severely hit by the travel restrictions imposed to control the pandemic.

However, he said, as commercial flights into and outside Rwanda resumed starting from August, 2020, the air cargo transport should be revised downwards, and indicating that airfreight contributes a lot to the success of horticulture business.

He said that they appealed to the National Agricultural Export Development Board (NAEB), the Ministry of Agriculture and Animal Resources, and the Ministry of Trade and Industry to consider how they can adjust the prices for everyone’s benefits.

“We understand that they (airlines) are in business, and we (horticulture exporters) are also in business. But by the end of the day if we don’t come to a table and find a lasting solution to this particular problem, then we are likely to see all of us laying down our tools because of the high prices as we would not be making any margins to be able to stay in the business,” he said.

Why the increase in the flight fare, and the way forward

RwandAir CEO, Yvonne Manzi Makolo told The New Times that the airfreight fare increased to $1.8 a kilogramme because of the [Covid-19] pandemic, which still exists.

Makolo noted that charges for cargo handling have increased in Europe because of a few people working as a result of the situation.

“If the airline goes below the $1.8 a kilogramme, it will be a major loss for us,” she said.

Before the pandemic, she said, RwandAir was doing three flights a week, but it went down to two flights a week as flights have not yet stabilised because of the pandemic. She added that tough the borders were reopened; there are not enough passengers as before.

“So, we had no choice but to raise it to $1.8 [a kilogramme]. Once things stabilise, then we will go back to the way things were. But at the moment, everything is expensive because of the pandemic,” she said.

Speaking to The New Times, Jean Marie Vianney Munyaneza, Emerging Commodities Division Manager at NAEB said that because of airline high operation costs that were caused by the Covis-19-induced lockdown, the airfreight fare was increased to $1.8 for RwandAir.

He said that that was realised that such a price was like a benchmark can enable exporters to carry on their business.

For Ethiopian Airlines was charging $2.2, he said, the Government of Rwanda subsidised the cost with $0.4 so that it became $1.8.

However, he said, when the commercial flights resumed, Ethiopian Airlines reduced the fare to $1.8 (without Government subsidy).

“What we are doing is to monitor changes in market prices, and consider whether the $1.8 per a kilogramme really needs to be subsidised. We are in talks with Rwanda Horticulture Exporters Association on that so that we decide what can be done,” he said.

He indicated that what is intended is to lower the production and operation cost of exporters.

Rwanda exported 31,788 tonnes of horticulture commodities (vegetables, fruits and flowers) which generated $28.7 million (about Rwf27 billion) during the fiscal year 2019/20, indicate figures from the National Agricultural Export Development Board (NAEB).

The country targets $130 million from horticulture exports by 2024, according to data from NAEB.