The delay in the signing of the
trade deal between the European Union and the East
African Community (EAC) is affecting Kenya’s flower
sector, the industry lobby said late on Friday.
Flower Council (KFC) CEO Jane Ngige said that the EU
currently absorbs over 65 percent of all Kenyan flower
industry is therefore waiting for the speedy
conclusion of the deal, so that Kenyan flowers can
continue to enjoy preferential access into the
market,” Ngige said during KFC’s 15th Annual
meeting brought the industry stakeholders to discuss
challenges and opportunities in the sector. The EU
parliament has set a deadline of October 2014 within
which the deal should be concluded.
Kenya does not sign the deal by then, exports to the
EU, including flowers will attract an import duty of
between six to 12 percent,” the CEO said.
added that due to the ongoing economic crisis in the
Euro zone, Kenyan flower exporters will not be able to
pass on the duty to the consumers.
to KFC, tariffs will also make Kenyan flowers less
competitive compared to its competitors in the South
American region which have already concluded a trade
deal with the EU.
Kenyan Rose cut flowers account for approximately 40
percent of all EU imports. She added that production
for 2013 is expected to reach 120,000 tones, similar
to the figures achieved last year.
added that the industry has been holding back
investments in the sector until a deal is reached.
said that only a timely trade agreement with the EU
will safeguard investments in the floriculture sector
that are estimated at 595 million U.S. dollars.
expect the industry to earn 502 million dollars in
2013, which is same as last year but a decline from
2011’s 537 million dollars,” she said.
CEO said that current area under cultivation stands
at 3, 000 hectares. “However, our short term goal
is to increase acreage by ten percent so that we can
increase the sector’s contribution to the
economy,” she said.
to the ministry of agriculture, the flower sector
accounts for1.6 percent of the Gross Domestic Product
Chairman Richard Fox said that floriculture industry
is seeking to diversify into other international
markets which have responded positively to promotions.
South Korea, Russia as well as and Eastern Europe
account for over 30 percent of export sales,” he
chairman added said that Kenya and Russian governments
are currently in talks with a view to reviewing trade
protocols. He added that sales to the U.S. market will
be boosted once there are direct commercial flights
linking the two nations.
chairman said that air and ground transport alone
account for 50 percent of all costs.
who is also Sustainability Directory at Finlays, said
most of the costs are incurred in foreign currency and
so the industry prefers a stable foreign exchange
regime. “Only the wage bill is paid in Kenya
shillings as all inputs such as fertilizer are
imported,” he said.
added that KFC is partnering with the Kenya
Association of Manufacturers in order to develop
ways of improving operations efficiency.
will help the industry maintain competitiveness as
the sector has low profit margins,” he said.
addition, we know that some enterprises have wastage
of primary energy inputs of between 10 to 30
percent,” he added.
said the industry is now encouraging local sales of
flowers so as to tap into the growing middle class.
scale farmers should also improve their standards so
that they can access the more lucrative export
markets,” he said.