Lockdown Easing in Europe Revives Kenyan Flower Industry
(Bloomberg) -- Kenya’s flower industry is recovering from a near-collapse as European movement restrictions ease and Dutch auctions report an up-tick in operations.
Europe’s biggest supplier of flowers was hit hard by the crash of the global $8.5 billion trade in March as countries closed their borders to curb the spread of the coronavirus. Farms exported only 20% of the 60 tons of cut flowers they normally sent daily to the U.K., the Netherlands and Germany, and destroyed the rest.
Exports have resumed to reach 60% of Kenya’s daily capacity but the industry is still facing high freight costs and less space on airlines, Clement Tulezi, chief executive of the Kenya Flower Council, said by phone Thursday.
Per-kilogram freight costs have more than doubled to $3.3, from an average of $1.5 last year, Tulezi said. Airlines currently ship 1,600 tons of flowers weekly, compared with an exporters’ demand of 4,000 tons.
“If we had more freight capacity, we would do more,” Tulezi said.
The East African nation exported about $1 billion worth of flowers last year, with Dutch auctions accounting for almost half of its sales. Freighters will probably increase or resume their schedules in the coming month, according to Tulezi.
Royal FloraHolland, which runs four auction sites in the Netherlands, said revenue in the week of May 11 was €113 million ($124 million), 6.9% less than the same week a year ago. That shows the market is almost back to normal.
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