“We were looking at about 115 billion shillings ($1.24 billion) but we have revised down to about 84 billion shillings because of the euro zone crisis and the US debt situation,” Stephen Mbithi, the chief executive officer of the Fresh Produce Exporters Association of Kenya said.

Horticultural exports — fruit and vegetables — are a top foreign exchange earner for Kenya alongside tea, tourism and remittances, with sales to the country’s main market, Europe, accounting for 82 percent.

But the prevailing euro zone crisis, which has led to fluctuation of the euro and eroded earnings for the sector, has forced Kenya to cut its growth estimates for earnings from the sector during this year to 8 percent from 15 percent.

Horticulture exports raked in 78 billion shillings into east Africa’s biggest economy in 2010.

Foreign exchange players said a decline in earnings from the fresh produce sector would suppress hard currency inflows into the country.

The shilling has lost about 15 percent against the dollar so far this year, and traded at a new record low of 92.95 against the dollar on Friday.

“Nothing is supporting the local unit right now. Even news from the horticulture sector shows a dip of almost 50 percent, so in terms of inflows we are impacted. We are not expecting good inflows.” said Duncan Kinuthia, head of trading at Commercial Bank of Africa.

Mbithi said although the weaker currency favored exporters, the industry was suffering by having to pay more dearly for imports of raw material and fuel.

Mbithi said drought, which is harshly biting in some part of Kenya, is expected to hit the sector’s production if it persist.

The price of flowers, which contribute half of Kenya’s horticulture earnings, have fallen by about 1.5 percent due to the euro zone debacle, deepening the concerns for the sector, which is trying to penetrate new markets to beat the crunch.

“We are looking to diversify into new markets. We don’t want to lose market share in Europe, but we want more (exports) to the Middle East, Eastern Europe, the far east and the Americas.”

Mbithi said his group had secured export approval for French beans in the US market, allowing Kenya to sell the produce in the US for the first time.

Kenya’s horticultural exports took a big hit in the 2008-2009 financial crisis and there are fresh concerns with world stocks falling on fears that Europe’s debt crisis could spin out of control and that the US economy may slide back into recession.