The Red Sea crisis is affecting many agricultural industries around the world, like citrus fruits in Egypt, table grapes in India, and general fresh produce in Rwanda. For Rwandan company Virunga Biotech, the impact is twofold, as CEO Vinay Thummala recounts: "Not only is it more expensive to deliver to our customers in Europe, but we're having a hard time completing our investment in a packing house, with machinery from India.
Thummala continues: "We export habanero and chilies, among other fresh produce, to Europe. Due to EU regulation 2023/1134, which stipulates that products such as chilies must be grown in shade nets or that a post-harvest treatment is required, our exports are now dependent on the completion and commissioning of our new packing house, which has a fresh produce processing line that treats produce in line with EU requirements."
"Our packaging processing line is imported from India, and its complete delivery has been delayed since the outbreak of the Red Sea crisis. Our budget has increased by 200% and we still haven't completed the processing line. As a result, our logistics costs have risen by 50% compared with the already higher prices since COVID-19 and the Russia/Ukraine war," regrets Thummala.
The trade loss is significant, as the exporter explains: "The Rwandan season for chili and habanero starts in the third week of November and ends in the third week of June. This is a very good seasonality, given that Italy, Spain, and Morocco supply the EU from June to November. Demand for Rwandan chilies and habanero is strong in Germany, Italy, France, and the UK."
"For the time being, we rely on third parties in Kigali. We hope to complete the new warehouse within two months when the next campaign begins," concludes Thummala.
For more information:
Vinay Thummala
Virunga Biotech Limited
Tel: +250 781931756 / +91 8897679379
Email: [email protected]
www.virungabio.com