Kenya flower industry looks at a low season Valentine’s Day
A cocktail of challenges, from high freight charges, global economic recession, disruptions, high cost of farm inputs have conspired to put a damper on the Kenyan floriculture industry. This, coming as the world celebrates Valentine’s Day, a season where, an estimated 40 per cent of flower sales are made by Kenyan exporters each year.
Growers cite subdued prices at the auction and poor weather for what they say will be low sales. This despite them having been optimistic that 2023 would be a good year after a series of devastating events, ranging from COVID-19 to Russia-Ukraine crisis that almost brought the industry to its knees,
“The weather is not as it used to be during this time of the year. Nights are cold and very dry, and this is delaying production. Unfortunately, not much can be done with nature. If the difference is small, as in a few days, a few things can work, but if the delay is more, we just can’t change it. It is difficult to predict, how the coming days and weeks will develop, but in general, production is down by approximately 20%,” Sachin Appachu of Bliss Flora told Hortfresh journal.
The sector continues to grapple with capacity of cargo which currently stands at 2,000 tonnes. The situation is further exacerbated by the exorbitant freight charges that now stands at approximately Ksh300. Now consider that straight roses in European supermarkets fetch between Ksh235 and Ksh245.
The consumers in Kenya’s source market, especially Europe have also cut down on spending on luxury items as jitters about high cost of living and fear of recession grows. Ultimately these factors have had a toll on supply.
The Kenyan Flower Council is predicting a dip in volumes of cut flowers and earnings of up to 12 per cent this year.
Shipping by sea remains a viable option, industry players argue, with the industry now sending up to 15 containers of flowers by sea each week.
Since the pandemic, space on planes is limited, and freight rates are high. Unfortunately, even though they are not as high as last year, they are still way too high, almost double compared to pre-covid times.
Up to 70 per cent of Kenyan flowers are sold in the EU via the Dutch auction and the United Kingdom with orders starting to be delivered by mid-January. But the delay in production, poor weather, lack of cargo capacity due to limited cargo planes, and punitive freight charges are now threatening to affect timely delivery of the flowers even in markets where orders had already been placed.
Competition from Columbia and Ecuador, Kenya’s largest competitors has also reached fever pitch though rain and cloudy weather in both countries have made production difficul. The two countries that have traditionally mastered the marketing and networking art at the global scene continue to dominate the auctions.
But the Kenyan floriculture industry is equally struggling with a punitive business environment that has seen growers experience tough times despite the sector being one of the biggest foreign exchange earners for the country.
Growers in a bid to recoup the margins pass on these extra charges to consumers and in a competitive market like the Netherlands auction where supply has dwindled demand, countries like Ethiopia and Columbia that enjoy government incentives are able to sell their produce at prevailing market prices even at their lowest. For Kenyan flowers sellers, this would mean making a loss.
But growers and exporters have embraced new models to stay afloat. The new shift among growers into direct sales as opposed to the traditional auction continues to shield them from price fluctuations while allowing them to secure guaranteed markets at considerably lower rates. In some instances, the direct buyers cover logistics like air freight which ordinarily eat into the revenues of the growers. And while this has meant change of models to grow varieties dictated by buyers, growers have warmed up to the idea due to the returns on investment.
And despite low consumption by the local market, Valentines remain one of the seasons the industry bets on to shore up sales. This year however the industry predicts low prospects compared to previous years as the cost-of-living soars.
Michael Munene, a flower vendor at City Market who has been in the business for the last ten years is not optimistic of good sales this Valentines. “By early February we start receiving orders from offices and customers. This year business is shockingly low I have 20 per cent less orders than I received last year by this time. It is going to be a tough one,” he said.