Flowers sub-sector staring at not-so-rosy Valentine's

Flower traders are staring at a not-so-rosy Valentine’s due to tough market conditions. The traders say a difficult trading period due to poor weather and duplicity of taxes levied by both the national and county governments have seen revenue for the sector dry up.

Kenya has been the dominant flower grower in the region for years, until Ethiopia checked in and became the key competitor. The Ethiopian government saw the potential in flowers when they first exported flowers worth $150 million (Sh15.263 billion) and decided to create incentives to attract investors in the sector.

A worker at the Naivasha-based Van den Berg flower farm prepares roses for export to the European market ahead of Valentine's Day. (PHOTO: ANTONY GITONGA/ STANDARD)

“Ethiopia is giving free tracts of land for people to grow flowers. It is also connecting these farms with electricity and building roads to open them up. It has also introduced tax incentives that have become irresistible to investors,” Kenya Flower Council Chief Executive Jane Ngige said during a media briefing yesterday. “All this has seen growers shift their base from Kenya to Ethiopia. Some have closed their shops here and relocated to Ethiopia,” she added.

Instructively, flower exporters are paid in Euros. The Euro has been weakening against the dollar and this has hit the firms’ bottomline. Again, most of the farm inputs required are imported and paid in dollars. The currency fluctuations have seen the shilling depreciate against the US dollar, thus increasing the cost of inputs.

Also, the players claim the Government is holding about Sh50 billion in tax refunds to flower exporters.

These challenges have seen the traders project a new sales low of 30 per cent this Valentine’s Day. But all is not lost in the sector given that in 2014, it exported 137,000 tonnes of flowers. The 2015 numbers have not yet been released.

Kenyan flowers have access to 60 different markets. The country has 2,700 acres of land under flower farming, which brings in $540 million (Sh54.95 billion) in revenue.

The flower council has joined the Fresh Produce Exporters Association to form The Kenya Horticulture Council. The new council will manage risks like making sure the produce complies to market requirements.

Tricky day

“The council will check that flowers and other perishables comply with standards. For example, the produce must have no residue levels. No bugs; no pests,” Ms Ngige said. “Farmers have a code of conduct to work with in terms of compliance and the council issues them with compliance certificates. This way, we keep the reputation of Kenyan flowers intact,” she added.

Flower vendors will also have something to smile about since the flower council and the Nairobi City Council (NCC) are working to promote the Flower Vendors Association from hawker’s status to micro-enterprise.

Despite the challenges, flower vendors are out on the streets trying to get the product to the market early for Sunday.

“Sunday is a tricky day for Valentine’s to fall on, since many people are relaxing at home or in church, and do not care to get out to the streets for flowers. But the vendors want to make sure everyone buys flowers for their loved one before the big day, by selling them early,” Ngige says.