Kenya flower export earnings up by 18% in First Nine Months of 2016

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Kenya, which supplies more than a third of all cut flowers sold in Europe annually, said profit from stem shipments advanced 18 percent in the first nine months of the year as volumes exported climbed.

Earnings rose to 53.9 billion shillings ($529.7 million), the National Bureau of Statistics said on its website Wednesday. The volume exported increased 6.5 percent from a year earlier to 96,788 metric tons, it said.

The East African nation’s farming exports, including shipments of black tea, fruits and vegetables, are the biggest source of foreign exchange for the $63.4 billion economy after remittances.

“We expect this year’s earnings to surpass last year’s $630 million, mainly because of higher prices our flowers have been fetching at the new direct-sale markets,” Kenya Flower Council Chief Executive Officer Jane Ngige said in an interview Tuesday in the capital, Nairobi.

Sales by growers in the nation to buyers in places such as Japan, Russia and Dubai now make up 60 percent of the nation’s exports, compared with only 20 percent five years ago, according to the council. Kenya traditionally sold its flowers at the Royal FloraHolland auction in Aalsmeer, about 30 kilometers (18 miles) west of Amsterdam.

The closing of the local unit of Karuturi Global Ltd. in March has hurt flower production, Ngige said. The Bengaluru, India-based producer’s commercial-farming lease in neighboring Ethiopia was also canceled last year. Annually, the company produced 422 million rose stems in Kenya, and 115 million in Ethiopia, according to its website.

Direct Flights

Kenya exported 122,825 tons of flowers last year, according to the council’s website, down from 136,601 tons in 2014, as heavy rains hurt production.

 Lower oil prices have made transport logistics through Nairobi’s main airport cheaper, which helped to boost direct exports, Ngige said. The facility can handle 5,000 tons weekly, compared with demand of 3,000 tons, said Sanjeev Gadhia, founder and chief executive officer of Astral Aviation, which operates four flights to Europe weekly, shipping 400 tons of perishables.

The U.S. could become a key exports target if authorities there allowed for direct flights from Kenya, Ngige said. At the moment, flights headed to the U.S. from Kenya have to make a change over, typically in an African or European city, because of security concerns.

“The U.S. is the single most important market for us,” Gadhia said.

Source: Bloomberg