Council downplays fall in value of flower export

NAIROBI, KENYA: The value of Kenyan cut flowers fell in the 12 months to May even as Ethiopia races up the ladder in new global markets.

According to the Kenya Flower Council (KFC), Kenya exported flowers worth Sh23.6 billion at the end of the year to May, down from Sh35.1 billion.

This was despite a marked increase in the quantities exported which rose from 60,074 tonnes to 71,951 tonnes.

“The figures were not so bad given the noise of the election year,” said KFC Chief Executive Jane Ngige

“We are partners with Ethiopia in the export business but of course as a business they are competition. I think what is important is quality. Kenya has a secured market as well,” she said.

After a period of rapid growth between 2000 and 2010, flower exports rose from 40,000 to 120,000 tonnes, equivalent to an annualised growth of almost 12 per cent.

But exports have fallen back to a growth of less than two per cent, as Ethiopian flowers benefit from massive subsidies and lower production costs.

In 2016, Kenya exported flowers worth Sh71 billion by producing 133,000 tonnes while a year earlier statistics from Horticultural Crop Directorate indicated that 121,346 tonnes of flowers worth Sh62.9 billion were produced.

In 2014, official statistics indicate that the flower industry earned the country Sh54.6 billion with export volumes totaling 136,601 tonnes.

Ethiopia, on the other hand, has become a major force in global floriculture in the past two decades, with its flower exports currently focused on Europe, making it Africa’s second-biggest producer after Kenya and fourth worldwide.

The country has access to the American market, especially with direct flights to the US, with State-backed Ethiopian Airlines saying it is evaluating freighter flights through Miami - the main entry point for American flower imports.

Kenya is still seeking direct flights to the US, although Kenya Airways boss Sebastian Mickosz says it is not an immediate priority.

Kenya has however seen growing interest in logistic firms seeking to tap major regional deals this year with mergers and acquisitions.

Swiss logistics firm Kuehne + Nagel (K+N) acquired Kenya-based forwarder Trillvane Ltd Kenya specialising in the export of flowers and vegetables to multiple destinations for an undisclosed amount.

Swiss freight forwarding and logistics company Panalpina acquired Air Connection, a specialized forwarder of flowers and vegetables. The move follows Panalpina’s acquisition of Airflo in 2016 and positions the company as a clear market leader in perishables in Kenya.

Kenya is also trying to penetrate the Australian market but has had tariff barriers expanding in China which charges a 4 per cent levy on flower exports.