Kenyan Flower Growers Need Freighters for Valentine’s Day
(Bloomberg) -- Reduced airfreight capacity and lockdowns in key European markets threaten to hurt Kenyan flower sales for Valentine’s Day.
Kenya’s flower producers are receiving orders for Feb. 14, but freight capacity is “our biggest worry,” Clement Tulezi, chief executive of the Kenya Flower Council, said on Monday. Freight demand typically doubles to 5,500 tons in the week before Valentine’s Day, requiring an additional weekly shipping capacity of 3,000 tons, he said.
The East African nation exports about 70% of its flowers via Amsterdam, and restrictions in the Netherlands and other key export markets, such as the U.K., are likely to hinder sales. Kenya has allowed Ethiopian Airlines to deploy additional freighters on the Nairobi-Amsterdam route to ease capacity constraints, according to Tulezi.
While flower exports by volume declined 9.3% last year, the value of shipments increased to 108 billion shillings ($980 million) from 104 billion in 2019. Freight costs have more than halved to about $2.20 per kilogram, from a high of $5.20 during last year’s lockdowns, but that’s still above the average of $1.50 around Valentine’s Day last year before the outbreak of the coronavirus pandemic.
“We’re operating in an environment of low orders, low demand, low prices and increased costs,” Billy Coulson, managing director of Nini Flowers, said by phone. “The retail market is doing well as supermarkets are open. I’m cautiously optimistic.”
Sales at Royal FloraHolland, which operates three international auctions in the Netherlands, look “quite positive” in the lead-up to Valentine’s Day, with lower supply pushing up prices, said company spokesman Michel van Schie. Prices are about 16% higher than the same period last year, he said.
Sanjeev Gadhia, the chief executive of Astral Aviation Ltd, a Nairobi-based freighter, said the carrier has doubled its cargo flights to Europe for the next two weeks, and will be making inaugural flower shipments to Dubai and Saudi Arabia.
“The foray to the Middle East will help diversify Kenya’s market and reduce dependency on Europe,” Gadhia said via phone. “The demand for freight is very high.” Previous flower shipments to the Middle East were small quantities and could be transported in the cargo holds of passenger planes, he said.
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