The projected recession in major European economies has left Kenya’s flower exports staring at uncertain future in the short term.
Major economies like Netherlands which sank into recession last week, are emerging as a new export threat that Kenya will have to contend with.
Recession is usually associated with, the economy shrinking, consumer spending and business investment also dipping, essentially meaning the consumers may cut their budgets.
Netherlands is a major destination for Kenyas flower exports, with industry data showing that Kenya controls 44 per cent of the cupflower export to Europe through Netherlands.
Kenya exported Sh61.6 billion worth of goods to the Netherlands in 2021, with flowers being one of the most exported products.
On the other hand, the state imported Sh46.8 billion worth of products from the Netherlands, meaning the trade is favouring Kenya.
However, industry players say they are yet to feel the effect of the recession.
Kenya Flower Council (KFC), Chief Executive Clement Tulezi, told the Star that the export of horticultural products to Europe has been consistent despite the recession fears.
“We are exporting good volumes of cut flowers around 3,500 tonnes per week, and currently we haven’t noticed any indications of change of the market due to the announced recession. Demand for our produce is still high,” said Tulezi.
Flowers are the third-largest foreign exchange earner for Kenya.
The country exports roughly 70 percent of its flowers to European countries, with the main export markets being the Netherlands, the UK, Germany, and Norway, with an export share of 43.3 percent, 17.1 percent, 5.8 percent and 5.6 percent, respectively.
Most of Kenya's flower exports are sold at Dutch auctions, while others are directly sold to customers such as supermarkets and florists.
Tulezi however noted that the demand for roses is currently low compared to non-roses a situation that will change as the years draws to a close.
“The worry to Kenya horticulture industry could be if the individual purchasing power in the Netherlands and other regions in the EU is affected,” said Fresh Produce Consortium of Kenya chief executive Okisegere Ojepat.
Earnings from cut flowers exports reduced by 6.5 per cent in 2022 to Sh103.6 billion from Sh110.8 billion in 2021 according to the Economic Survey 2023.
In spite of the decline, cut flowers continued to dominate fresh horticultural exports accounting for 70.9 per cent of the total fresh horticultural export earnings in 2022.
Kenya's cut-flower industry employs more than 200,000 people across its different value chains and impacts - directly and indirectly - the livelihoods of up to 4 million people.
According to the survey, floriculture earned Kenya USD 809 million (Sh116.9 billion) affirming its great contribution to the country's GDP.
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