Kenya’s flower industry profits wither from Middle East war effect

The ongoing conflict in the Middle East threatens to cripple Kenya’s floriculture sector as growers now report up to $1.4million in weekly losses.

Following the attack on Iran by U.S. and Israel, and the consequent spread of hostilities across the Middle Eastern region, global trade has taken a hit and the effects are beginning to be felt in the Kenyan horticulture sector.

Growers in the sector worth over $800 million, according to the Central Bank of Kenya, said that flower exports have been largely affected in both a reduction in demand as well as shipping disruption both to the Middle East and Europe.

At Isinya Flower Farms, located 56 kilometres (35 miles) south of Nairobi, Marketing Manager Anantha Kumar said exports have dropped by more than 50 percent.

“Previously we used to export 450,000 stems per day and currently we are doing about 150,000 to 200,000 stems a day. So we are discarding almost 50 percent,” Kumar told the Associated Press.

Ideally, direct flower exports to the Middle East account for about 30 percent at Isinya Flower Farms and up to 15 percent nationally; the largest market being Europe accounting for up to 70 percent.

However, while the Middle East isn’t Kenya’s main flower market, disruption of cargo freights to Europe has resulted in reduced exports as well as higher costs.

Kumar said the freight costs have almost doubled as unavailability of freight and makes it unviable for business.

An “immediate impact”

According to Kenya Flowers Council, private sector organization representing growers and exporters of cut flowers and ornamentals in Kenya the ongoing conflict has resulted in over $4.2million in losses over the last three weeks. This has been attributed mainly to interruption of the markets and disruption in shipping as well as an increase in freight fees.

“The Middle East remains a very important market and the disruption has an immediate impact on us. We see a reduction in movement, delays in movement of produce and longer routes and pricing is really high,” said Kenya Flowers Council Chief Executive Officer Clement Tulezi.

“Last week we were at $5.8 per kilo which is the highest we’ve had in the last 10 years and a pricing like that is unsustainable,” he added. He said growers “have lost about $4.2 million worth of flowers over the last three weeks.

About $2.1million is attributed to lack of flights and the rest due to delays. If this goes on we are looking at about $1.8 million in losses every week.”

Growers like Isinya Flower Farms now warn that should the conflict drag on, the sector will continue to deteriorate, with scenarios similar to the Covid 19 period looming.

This, experts warn, will likely result in job losses in the sector that employs up to half a million Kenyans directly.

The Kenya Flowers Council said it is lobbying the Kenyan government to introduce direct cargo flights to Europe in a bid to maintain the European market in a bid to cushion growers.