Kenya Woos Private Investors to Regain Pyrethrum Top Spot

Kenya plans to regain its position as the world’s biggest exporter of pyrethrum, a flower used to make insecticide, by allowing private producers to grow the crop, the Pyrethrum Regulatory Authority said.

The authority is targeting output of as much as 15,000 metric tons of liquid pyrethrum, compared with 1,000 tons the East African nation produced last year, Managing Director Alfred Busolo said by phone from the capital, Nairobi, on Aug. 4. Legislators enacted a law governing the industry last year, spurring interest from domestic and foreign investors, he said, without identifying them.

“Kenya grows the finest pyrethrum flowers on earth, which are in high demand throughout the world,” Busolo said. “With the Pyrethrum 2013 Act in force, the country will once again become the world’s top exporter.”

Kenya ranked as the world’s third-biggest producer of dried pyrethrum last year, compared with 2009 when it was the world’s largest grower, according to data from the Food and Agriculture Organization, which lists Tanzania and Papua New Guinea as the top two. Exports are shipped to countries including Australia, China, India, the U.S. and European nations, Busolo said.

Kenya’s share of the global pyrethrum market is currently about 2 percent, compared with about 70 percent in 1998, according to the state-run Pyrethrum Board of Kenya, the forerunner to the authority, which held a monopoly for licensing, marketing, growing and registering players in the industry.

Record Crop

The country produced a record crop of 17,710 tons in 1992, triggering a collapse in prices that left some farmers in financial ruin, Busolo said.

Matters worsened as a result of “governance issues and stringent and outdated regulations including delayed or non-payment to farmers,” he said.

To support the industry, the Kenyan government has since 2006 injected 1.45 billion shillings ($17 million) to pay salary arrears and purchase factory inputs, including seedlings, according to the authority.

Pyrethrum currently contributes about 200 million shillings to export earnings, compared with about 10 billion shillings in the 1990s, Busolo said.

The plant was introduced in Kenya in 1928. The country currently has two pyrethrum-processing factories constructed in 1959 and 1962, respectively. Annual installed capacity is 30,000 tons.

Agriculture accounts for more than a fifth of economic output in Kenya, which is the world’s largest exporter of black tea and also produces coffee.

To contact the reporter on this story: Charles Wachira in Nairobi at cwachira@bloomberg.net

To contact the editors responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net Paul Richardson, Sarah McGregor, Ana Monteiro

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