Kakuzi profits plunge as drought, Red Sea disruptions hit avocado, macadamia exports
Macadamia faced a substantial profit drop from higher global supply, weaker Chinese demand, and the impact of U.S. tariffs.
KENYA – Kenyan agricultural enterprise Kakuzi has reported significantly lower half-year profitability as avocado and macadamia markets came under pressure from lower production, logistics disruptions, increased global supply, and weaker demand.
Group profit before tax fell to Ksh 10.4 million (approx. US$80,327) in half-year 2025, down from Ksh 435.2 million (approx. US$3.36 million). The significant decline reflects the combined impact of environmental challenges and economic pressures on the company’s primary export commodities.
First, avocado operating profit declined to Ksh 215.9 million (approx. US$1.67 million), down from Ksh 394.9 million (US$3.05 million). Global supply weighed on prices, while a lower crop from the company’s orchards and disrupted shipping routes affected returns.
Shipping lines reverted to the longer Cape of Good Hope route as tensions affected Red Sea traffic, with longer transit times affecting avocado quality and price expectations.
In addition, dry conditions during the third quarter of 2025, in the fruit expansion phase, led to fewer and smaller avocados. Although Kakuzi has irrigation and water storage infrastructure, the company said rapid moisture depletion increased water stress in the orchards.
Second, macadamia’s operating profit fell to Ksh 68.2 million (US$526,763), down from Ksh 318.8 million (US$2.46 million). Higher production in Australia and South Africa, rising domestic Chinese production, weaker Chinese demand, and a softer U.S. market linked to tariffs all contributed to lower sales and pricing.
Third, blueberry operating profit increased to Ksh 15.1 million (US$116,629), up from Ksh 13.4 million (US$103,499), despite freight disruptions linked to conflict in the Middle East. While the blueberry division remained a small source of growth, the overall financial performance was heavily weighed down by falling commodity prices and rising shipping costs.
The performance comparison across market segments shows avocados experiencing a significant profit decline due to lower production, logistics disruptions, and global supply pressures. Macadamia faced a substantial profit drop from higher global supply, weaker Chinese demand, and the impact of U.S. tariffs.
On the other hand, blueberry achieved modest growth despite freight disruptions, demonstrating relative resilience compared with other segments.
In addition, the company is using technology to mitigate climate risks by accelerating investment in continuous, multi-point digital soil-moisture monitoring, which provides real-time orchard data and supports irrigation management.
Lastly, the accelerated investment in digital monitoring systems is a proactive response to these challenges, aimed at improving resource efficiency and protecting future profitability.
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