NAIROBI, Kenya, May 24 – Fresh-cut flowers, Kenya\’s flagship export crop, have taken a battering from the global financial storm and erratic weather conditions which have made earnings wilt by around a third this year.
Earnings from exports have so far this year shrunk by 35 percent compared to the same period last year, said the Fresh Produce Exporters\’ Association of Kenya (FPEAK).
"There was a serious loss," said Stephen Mbithi, chief executive officer of FPEAK.
Demand for flowers dipped by about 25 percent as recession-hit consumers in traditional European markets tightened spending on luxuries.
Kenya sells more than 80 percent of its flower exports to the European Union, with nearly half of those snapped by British flower lovers.
"We had already sensed that things would get worse when people started being laid off, especially in the UK. We knew there would be losses and in such times, the last things you think of buying are luxury goods," said Mbithi.
"We have had a very bad first quarter. Demand fell very huge," said trader Jens Caro, who heads Intergreen Kenya, one of the top flower exporting giants.
"What we see now is that people are conscious of their spending, they think twice before they buy a bunch of flowers, or a new car," said Caro.
Statistics from Kenya Flower Council (KFC) show earnings took a knock from Sh13.36b in the first three months of the year to Sh10.76b.
Earnings have also been hit by currency fluctuations.
Kenyan exporters get paid in euros and sterling pounds, but they have to pay for freight and related overheads in dollars.
The euro and the pound lost a lot of ground to the dollar during the first three months of this year.
"The global economic meltdown will continue to be an issue of concern for the flowers sector.
"But I think we might have seen the worst. There seems to be a stabilisation of demand, not to the same old demand, but at lower levels. We don\’t expect to recover on the volumes of last year," said Mbithi.
Apart from the shrivelling market, the flower sector is also reeling under the effects of global warming.
"We are more worried about the weather," said Mbithi.
Kenya went through a dry spell that sent growers\’ tensions through the roof last year. Many growers were unable to plant due to serious shortages of water.
In farms around the Mt Kenya area, rainfall did not even reach 30 percent of its normal level.
"It\’s still not anywhere near to normal," said Mbithi.
"It should be down to global warming, which is affecting the pattern and the amount of the rains," he added.
Rains that started falling in recent weeks have provided much relief and "we hope this will cease to be a concern," said Jane Ngige chief executive of the flower governing body, Kenya Flower Council (KFC).