By Lydia Gichuki
Kenya is now exporting around 20 per cent of its normal levels of flower exports, up from just 10 per cent in March, as improved access to air cargo services has combined with rising demand as Kenya’s main flower market of Europe begins to reopen non-essential shops, including florists, as well as some restaurants and hotels.
However, freight constraints are meaning flower farms are not yet managing to meet the full recovery in demand.
A flower farm from Nakuru County talking to Farmbiz Africa said it has been incurring losses since March when restrictions to stop the spread of COVID-19 began closing off export routes at the same time as commercial buyers, such as restaurants, closed and the purchasing power of European families collapsed.
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The farm, which used to export 100,000 stems of flowers per week pre-Covid saw exports fall to 10,000 stems a week by the end of March as flower auctions in the Netherlands, its main market, collapsed on falling demand.
As a result, the farm has laid off about 50 per cent of its workforce as there is no money to cater for their salaries. It has also been making composite manure with the surplus flowers, which it plans to use in the next season, meaning the inputs used to grow the flowers will not now secure any returns.
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Moreover, while transport of the flowers from the farm to the airport has been smooth, the cost of the air freight has tripled to Sh300 per kilogram, while the flower prices have remained the same, leading to much tighter margins.
However, the volume of sales has improved to some degree as cargo space and some European businesses have reopened. As a result, the farm is now exporting around 20,000 stems a week.
This ties with general industry trends, with Bloomberg reporting that Kenya’s flower farms are together now exporting around 20 per cent of the 60 tonnes of cut flowers they would normally send daily to Europe markets, including the UK, Netherlands and Germany, with the rest being destroyed.
Clement Tulezi, the CEO of the Kenya Flower Council (KFC), said the fall in demand is a result of lost demand in major markets in Europe, which accounts for 75 per cent of Kenya’s flower exports, as the virus has reduced the purchasing power of many people, thus reducing flower sales at auctions and direct markets across Europe.
Additionally, the freight cargo capacity decreased as the demand for flowers began to increase in the first week of May, he said, which saw the industry unable to meet the recovering demand.
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“We needed 3,500 tonnes capacity by the second week of May, but only 1,500 tonnes of capacity was available for all commodities, flowers, vegetables, and fish, as many cargo freight shifted to other areas, such as medicine and electronics, which are more lucrative. This shift was also as a result of many exporters stopping shipping when the demand was low,” said Tulezi
Before the COVID-19 outbreak, the freight capacity stood at 5,000 tonnes per week.
According to Tulezi, the industry is expected to recover by the middle of next year, 2021 and he urged farmers to hang in there without losing hope as many economies are now opening up.
The country exported 173,700 tonnes of flowers last year and the sector has been incurring losses of around Sh10m daily since the onset of the virus outbreak.
Photo; Flower farm