Farmers warm up to 8pc increase in flower exports

Kenya: Export of flower is expected to record about eight per cent rise this year after the European Union (EU) restored duty-free access to the country.

Kenya supplies about a third of the cut flowers sold in the European Union, according to available data.

However, the country lost its duty-free and quota-free access to the trade bloc on October 1 last year after the five-nation East African Community (EAC) failed to ratify an Economic Partnership Agreement (EPA) from 2007, or had not concluded a full EPA with the EU by a September 30 deadline.

An agreement was signed on October 14 and the country’s duty-free access was re-instated on December 25. Kenya Flower Council (KFC) estimated that its members lost about Sh100 million a month because of the duties.

The flower industry lost about Sh1 billion “because of the withdrawal of duty-free access, KFC Chief Executive Officer Jane Ngige told reporters recently, adding,

“We suffered a crisis in our confidence with our markets. We are hoping to regain that confidence this year.”

Kenya’s share of the global cut-flower market is more than 30 per cent, competing with exporters including Columbia, Ecuador and neighbouring Ethiopia, Ngige said.

Germany is the largest buyer of Kenyan flowers, while nations including France, Switzerland, The Netherlands and Norway are also “huge consumers,” she said.

Speaking to The Standard yesterday, she disclosed that production has started going up after a four-year stagnation at 120,000 metric tonnes.

“Last year, even though we faced quite a number of challenges both internal and external, our production is expected to increase 130,000 metric tonnes accounting about Sh50 billion as at the end of December 31,2014,” said Ngige.

According to Kenya National Bureau of Statistics, in 2013 the flori-culture industry exported 124, 858 tonnes valued at Sh46.3 billion.

During the last quarter of 2014, Ngige said the value of flower exporters were affected as grower and a traders started paying duty to the European Union (EU) market as the Government delayed to conclude the Economic Partnership Agreement (EPAs). Government delayed to conclude the EPAs negotiations as per the set deadline of September 30, 2014.

Until September 2014, Kenya had enjoyed unlimited and free access to the EU market but after the October deadline local exports started attracting duty of between four and 24 per cent in taxes. This led to loss in terms of paying taxes to the EU market by the flower farmers to the tune of Sh22 million every month.