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China-Africa Trade Information Service
info.afrindex.com
China-Africa Trade Information Service
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Kenya's cut flower market has grown steadily with strong export support, and new market prospects offer more opportunities, even though the sector must contend with challenges that make it especially vulnerable to adverse weather.
Cut flower exports earned KSh42.6bn ($423m) in the first four months of 2018, a 40.4% increase over the same period last year, according to data issued by the National Bureau of Standards at the end of June.
If maintained, the sector’s strong performance could see it eclipse the full-year export total of KSh82.2bn ($816.4m) in 2017, which itself was 16.1% more than earnings of KSh70.8bn ($703.1m) achieved the previous year.
Kenya is the world's fourth-largest exporter of cut flowers behind the Netherlands, Colombia and Ecuador, and makes up some 7% of global market share, according to Kenya Flower Council data. Products are exported to 60 countries worldwide; some 59% of domestic production is routed through the Netherlands' flower auctions, accounting for about 35% of all flower sales in EU markets, while other key markets in terms of export market share include the UK (14%), Germany, Norway and Australia (all 3%).
Looking east and west for new market access
While looking to build on its base, growers are increasingly eyeing markets outside of Europe to expand global market share, both through improved links to Asia and an upcoming direct transport connection with the US.
The Kenya Flower Council has identified India and Pakistan, along with China and Japan, where Kenyan products have already established a presence, as key potential growth markets in the region.
China is being targeted in particular, both due to the size of its market and the strong aviation links between the two countries, which facilitates access for flowers and other horticultural products.
In July the Fresh Produce Exporters Association of Kenya announced it would step up marketing campaigns in the country to boost the industry's profile and lift sales. While there is a ready market for Kenyan flowers in China, according to Hosea Machuki, the association's CEO, shipments to that market accounted for less than 2% of total horticultural exports.
Meanwhile, during a meeting with South Korean Prime Minister Lee Nak-yeon in late July, William Ruto, Kenya's deputy-president, singled out cut flowers as being among the products with the most potential to break into the South Korean market and help re-align the trade imbalance between the two countries.
Turning west, the launch of direct flights between Nairobi and New York's JFK International Airport by flag carrier Kenya Airways in October could open up the North America market for Kenyan flower growers, with faster uplift times and lower costs boosting product appeal.
Direct access to the US, rather than routing exports through Europe, could see Kenya's share of that market increase from present levels of around 0.4% to 10% in the medium term, according to the Kenya Flower Council.
Infrastructure remains hurdle to expansion
That the sector's fortunes are so closely related to the weather highlights the continued vulnerabilities it faces, particularly in light of infrastructure shortfalls that could become more pronounced due to climate changes.
Industry figures have highlighted a series of infrastructure and legal issues, including water supply infrastructure, power supply, land registration, trade and title deeds, as among some of the hurdles facing growers.
