Pineapple exporters needs financial intervention

Accra, May 4, GNA -The Sea-Freight Pineapple Exporters of Ghana (SPEG), an association of pineapple producers and exporters, says it needs a short-term financial intervention of six million dollars to increase the production of MD2 pineapple variety to enable members' to stay in business.

The financial assistance would allow the growers to put under cultivation a further 1,600 hectares within the next six months and to also boost production of the crop by 32,000 tonnes or up to 40 per cent by the year 2008.

The need has arisen because the European Union, Ghana's traditional market for pineapples has shifted its demand from the consumption of the country's Smooth Cayenne to the South American developed MD2 variety. Government had already provided a two million dollar facility to the industry for the procurement of MD2 planting material for multiplication and planting. This led to the purchase of 4.6 million MD2 suckers from local sources for distribution to growers.

In a presentation on the status of the pineapple export sector at a forum organised by the Ministry of Trade on Thursday, Mr Stephen Mintah, General Manager, SPEG said, although the government package then was timely to enable growers to start the cultivation of the new variety, more was needed to quicken the slow pace of production. He said the short-term financial intervention being required would enhance the export revenue of the crop to about 50 million dollars in 2008.

The crop, in 2005 contributed 40.4 million dollars, representing 52.5 per cent of the total revenue of 76.9 million dollars derived from horticultural exports during the period. Mr Mintah said the association and the Ghana Atomic Energy Commission have established the Bio Plantlets Ghana Limited to undertake the multiplication of MD2 planting materials for sale to the industry at affordable prices.

The company now has about one million suckers ready for sale to growers but the operators do not have the means to procure the suckers, he added.

Other collaborative effort being undertaken by SPEG are a Product Norms and Inspection Programme under which an independent inspections company are engaged to undertake quality control at growers pack houses and the Tema port.

Mr Mintah said short-term financial package should be channelled through the association to ensure repayments through the Group Marketing Strategy under which all export proceeds would be paid to SPEG. The Association commenced the implementation of the Group Marketing Strategy using uniform cartons and a single brand. The first shipment under the scheme was done last week to buyers in Spain under guaranteed prices.

"SPEG is currently negotiating with FYFFES and CAPESPAN of Europe and South Africa respectively for the marketing of Ghana's produce under the strategy," Mr Mintah said.

Apart from finance, Mr Mintah said the high freight rate compared to their competitors was also a major challenge.

Ghanaian Exporters currently pay freight charges of about 220 dollars per pallet (0.8 tonnes) compared to 150 dollars and 175 dollars for Costa Rica and Cote d'Ivoire respectively.

Mr Mintah explained that the high freight was due to the fact that the country's export volumes did not permit the industry to charter its own vessels and negotiate for good freight rates.

"Ghana needs to increase her export volumes from the present 60,000 pallets per year by sea to a minimum of 120,000 pallets to be able to charter dedicated vessels."

There are also marketing constraints because the companies sell on consignment basis, leaving the pricing of the product in the hands of the buyers and lack of assurance of consistent quality leads to lower margins for exports.

Mr Mintah said in the long-term, the industry required long-term development finance with interest rates between five and seven per cent to be utilised for the acquisition of land, expansion of pack houses, pre-cooling facilities, refrigerated and flat trucks, among others. He therefore appealed to government, the Banks, the donor community and other stakeholders to offer the needed financial lifeline to the pineapple industry.

Mr Allan Kyeremanten, Minister of Trade and Industry urged the banks to consider long-term financing for the export sector. He also urged the exporters to work on their marketing to be able to attract support from the financial institutions.

Mr I.T. Jackson, Deputy Director, Ministry of Food and Agriculture, said the Ministry under the horticulture exports industry initiative is undertaking a collaborative sucker multiplication with smallholder farmers. This scheme is expected to generate about 30 million suckers over the next 20 months. 04 May 06