No longer a bed of Roses for flower growers In Kenya due to high inflation
Rows of roses which bloomed on a farm in Kajiado, are being packed up to be sent out to lovers worldwide. Love is in the air ahead of Valentine’s Day in Kenya.
Isinya Roses and Porini Flowers grows standard roses and red roses, Valentine’s day is a big event for the company. But despite being a busy period – they are also feeling the impact of the war in Ukraine and high inflation.
“All our exports to Russia were passing through Netherlands, and now since there is a restriction from Netherlands, there is no export to Russia. We are facing a big problem, bigger challenges and also in Ukraine, we had five percent of our volumes going into Ukraine also which has completely stopped now. With the restriction of Netherlands transporting to Russian countries, even the Russian orders have dropped drastically. That volume, we are trying to see where we can sell, which countries can take that which is still a struggle, we are still struggling on that,” explains Ananth Kumar, group marketing manager, Isinya Roses and Porini Flowers.
Around 60 percent of the company’s flower harvests is bought by the European market. The rest is bought by Australia, the Middle East, UK, Russia and Asia. But with the weakening of the Euro, the company is feeling the impact of the economic downturn. Coupled with the rise in the cost of living worldwide, households are cutting down on their spending – sales have dropped significantly, says Kumar.
“Because of the euro exchange rate to the dollar, that has also hit us badly. All our sales had dropped at one point; it had gone to a thirty percent drop due to the recession in the European side. At the same time, the fertiliser cost us doubled, the packaging cost has increased, the freight rate has increased – so that was a very hard time for us to survive.” Harriet Iminza, an employee at Isinya Roses, says flowers are a romantic gesture to show love.
“Love makes the world go round. People should continue to buy roses – the more they buy flowers, the more I earn a sufficient income that enables me to support my family.”
Households and businesses across Europe have been plagued by surging energy costs since Russia launched its war in Ukraine in February 2022. It has played havoc with oil and natural gas markets and have been the main driver of inflation.
Inflation also has been worsened by bottlenecks in supplies of raw materials and parts amid rebounding global consumer demand after COVID-19 pandemic restrictions ended. CEO of Kenya Flower Council, Clement Tulezi, explains the economic climate means flower growing is no longer a bed of roses.
The Kenya Flower Council is a lobby that represents large-sized growers. “The euro, we have seen in the last 12 months has lost value against the dollar on about 12, 15 percent and that is huge. That goes back to all the expenses that we incur, in terms of importing the materials that we use on the farm. But also when we export because a lot of contracts are in euros and then when you have lost that value and you have to continue trading with the US also, getting a few things in the US, it just becomes complicated. It just continues to shrink the market, it goes really to eat into the bottom line, you know into the profit for the growers exporter so, everyday we are always hoping that international currencies will remain very stable.”
Despite signs of positive growth in sales in 2021 following the pandemic, growers hopes for continued growth were dashed after inflation hit new records in 2022 in Europe.
Kenyan flower exports is one of the largest supplier to the EU. Typically, from September and May is considered the busiest periods of the year for Kenya’s floriculture industry. Valentine’s Day falls on Tuesday, February 14th, 2023.