Johannesburg - South Africa has temporarily halted flower exports to Europe after a cloud of volcanic ash caused flight suspensions across much of Europe, an industry official said on Monday.
Rene Schoenmaker, chairperson of the Flower Growers Association, said exporters had also suspended shipments of fruit and vegetables to Europe and that this would have a major impact on trade in fresh produce
"It's hard to put a figure as we speak... we have never experienced anything like this before," Schoenmaker said.
Airline industry group IATA called on Monday for steps to reopen European airspace shut down by the ash cloud and the European Commission said it may approve compensation for airlines losing $250m a day.
South Africa, Africa's agriculture hub, exports about R400m worth of flowers each year, with 70% going to Europe.
"We will divert (the flower exports) to other parts of the world, or it will be sold locally," Schoenmaker told Reuters when asked what the exporters would do with the excess flowers.
Meanwhile, Kenya's horticulture industry has lost $12m due to the disruption in air transport and will take several weeks to recover even if flights resume now, its association of exporters said earlier on Monday.
The Kenyan shilling slipped to its lowest against the dollar since March 25 largely on the back of these export worries.
"It is weaker, but it is still roughly within its recent range," said Standard Chartered chief African economist Razia Khan. "I think as everywhere markets are still taking the shutdown on a day by day basis. If it gets to a week and there is still no sign of things clearing, you could see a much wider sell-off."
Ethiopia has lost nearly $2.6m in flower exports after the country's main carrier grounded flights to Europe, whose skies have been shuttered due to Icelandic volcanic ash.
The volcano flight shutdown has also hurt world markets.
Shares rattled
Predictably, airlines and travel firms were the largest losers, continuing their fall from Friday as a shutdown of European air travel entered a fifth day.
British Airways, Lufthansa, Iberia, Ryanair, Aer Lingus, Air France-KLM and Finnair were down 2.7 to 7.7%.
Travel firm Thomas Cook was the largest loser on the UK share price index the FTSE 100, down 3.9%. Channel Tunnel operator Eurotunnel rose 2.7% as travellers sought other routes.
The airline industry says it is losing some $200m a day, with many analysts assuming the costs will end up being borne by already overstretched governments.
"Talk of the need for government bailouts for airlines will surely just add to concerns over the state of public finances in Europe," said Royal Bank of Scotland analyst Tim Ash.
"Presumably economies in Europe dependent on tourism will be disproportionately hit, depending on how long this all pans out. Unfortunately... the likes of Portugal, Greece and Spain look vulnerable, as does Dubai."
Lower demand for jet fuel helped push crude oil to a three-week low, with oil firms such as BP and Royal Dutch Shell down almost one percent
The most striking indirect victim of the volcano cloud was Greece, which saw the spread between its bonds and German debt rise sharply after the flight shutdown forced the postponement of an International Monetary Fund and European Union meeting.
The Turkish lira hit a 10-day low while stocks hit a two-and-a-half week low.
- Sapa