NAIROBI, Kenya, Dec 4 – The Kenya Flower Council has allayed fears that the on going global financial crisis will negatively affect the horticulture industry.
The Council’s Chief Executive Officer (CEO) Jane Ngige told Capital Business on Thursday that although the credit crunch had affected consumer spending in many developed economies, particularly America and Europe, people were still spending on commodities such as cut -flowers.
“Flowers are emotive; they give a ‘feel-good’ feeling especially at a time when many of the Americans and the Europeans are facing a hard time due to the economic downturn,” she said.
There have been fears that the industry, which last year fetched the country Sh70 billion could be severely hit by the economic recession particularly in Europe where Kenya is the second largest supplier of cut flowers after Netherlands. Kenyan cut-flowers account for 36 percent of the European market.
Financial experts have argued that since the purchasing power of many people is affected, the logical thing would be to cut back on luxurious expenses such as cut-flowers and premium coffee and tea.
Mrs Ngige however expressed optimism that sector players would be able to maintain the volumes and profits derived from their exports.
Citing this year’s February sales which were higher than any other year despite the impact of post election violence, the CEO said the horticulture industry is resilient and has the ability to rebound after hard times.
Although the violence had seen over 16,000 flower farm workers displaced from their places of work, the industry exported more than four million stems of roses for Valentines Day alone.
She also disclosed that the depreciating shilling against major world currencies had presented mixed fortunes for the industry. Players were fetching good returns on the Euro, she revealed.
“Most of our businesses are done in Europe and the Euro has been quite strong. The dollar has been fluctuating a lot and this has somewhat affected us because we do our input business in the dollar,” she explained.
Mrs Ngige expressed confidence that they would be able to achieve their production target projected at 14 percent over the 91,000 tonnes posted last year.
With the intended introduction of direct flights between Nairobi and the United States, she hoped that flowers exported to America would also increase. Currently, most of the Kenyan flowers in the US market are re-exports from Netherlands.
“We know that we have a good product and from the promotions that we have been carrying out there (US), we have built a presence and we expect that these direct flights will allow growers to overcome the challenge of distance,” she added.
Mrs Ngige also relayed that their efforts to promote Kenyan flowers in Japan were bearing fruit and Kenya was now the second largest exporter to that market.
“From the business tour that we have just come from it is very clear that the Japanese like our products. What we need to work on now is the challenge of the distance (between Kenya and Japan) and those of quarantine,” she enthused adding that the government was eager to find solutions that would grow the market.
The (Japanese) market has been a difficult one for Kenyan products to penetrate owing to its stringent export requirements. Cut flowers for instance have to be fumigated before being cleared for entry.