Inflation and high energy costs are driving up flower prices in Europe. The Kenyan flower industry is considered a cheap alternative, but the crisis is also having an impact there.
Besides Valentine’s Day, no other day of the year is as important for the flower industry as Mother’s Day on this Sunday. In the week before Mother’s Day, twice as many bouquets are sold as in a normal week. Traditionally, prices for popular cut flowers such as roses, tulips or gerberas rise before Mother’s Day. But in view of high inflation, people look even more closely at money – flowers are more likely to be dispensable.
In Germany, sales of cut flowers fell by 500 million euros or around 14 percent to 3.1 billion euros last year, according to calculations by the Agrarmarkt Informations-Gesellschaft (AMI). “Especially in autumn, we felt the great uncertainty of consumers. Every purchase was carefully thought through and was not always in favor of the plant purchase,” said Frank Werner, chairman of the Federal Association of Ornamental Plants (BVZ) in the Central Horticultural Association (ZVG). the development. Rising energy costs and reluctance to buy had a noticeable impact.
The trend continues this year as well. In the first three months of this year, the demand for cut flowers in Germany continued to fall, says Britta Tröster, AMI expert for flowers and ornamental plants. In the meantime, sales are below the level of the pre-Corona year 2019.
crisis and prices
The Fairtrade association, which campaigns for better prices for smallholder families and decent working conditions for employees on plantations in developing and emerging countries, even reports a 23 percent drop in sales of cut flowers with the Fairtrade mark. Flowers are currently the problem child in the Fairtrade range, said Fairtrade Board Member Claudia Brück. In view of the current problems, flowers are apparently seen by many people in Germany as a luxury product that you can do without in difficult times.
The crisis has also made itself felt in the Netherlands, the most important flower supplier for Germany, in recent months. During the cold months, many flower growers had scaled back production because they couldn’t afford skyrocketing energy costs. Dutch rose growers have produced a third less than last year, Michel van Schie, spokesman for Royal Flora Holland, one of the world’s largest flower auctioneers, told Dutch public broadcaster NOS. This gap is partly filled by flown-in roses. The flower industry in Kenya, for example, has benefited from this. But the crisis is also making itself felt there.
Flower supplier Kenya
For years, Kenya has been one of the most important flower suppliers for Germany – according to the Federal Statistical Office, it is even the second largest supplier of roses after the Netherlands. Kenya’s advantage: In the warm, tropical climate around Lake Naivasha, 120 kilometers north of the capital Nairobi, the flowers can be grown all year round – while in Europe, the greenhouses have to be heated vigorously, especially in winter.
The flower industry is now one of the most important economic sectors in the East African country. Industry generates around ATS 110 billion (EUR 664 million) annually. About 200,000 Kenyans are employed in the industry. Other countries such as Ethiopia, Colombia or Ecuador have also established themselves as flower suppliers.
But the permanent crises of the past few years have not left the Kenyan flower industry unscathed either. Exports fell last year from 210,000 to 195,000 tons compared to 2021, according to the Association of Kenyan Flower Producers KFC. “The fall in exports can be attributed to the war in Ukraine,” explains Gonzaga Mungai, flower expert at Fairtrade Africa.
war and pandemic
As a result of the war, the EU included flowers on the list of goods that may not be exported to Russia. Kenyan flower producers sold most of their goods to Russia through the Dutch flower exchanges. In addition, the costs for flower growers are rising due to the higher prices for fertilizers worldwide.
The Kenyan flower producers, on the other hand, got over the corona pandemic surprisingly quickly after an initial shock. Of course, sales collapsed at the beginning after public life came to a standstill and flowers were hardly needed for events, says Mungai: “However, the markets have adapted over time. Since people could hardly leave the house, that’s it Customer interest in flowers increased again.” And while many in Germany have also discovered their green fingers during the pandemic, Kenyan flower producers could have increased their sales significantly at times.
However, those times are long gone. Increasing transportation costs and higher domestic taxes drove up costs for Kenyan flower growers. At the same time, they have to deal with the price pressure in Europe. Because if the prices for flowers continue to climb, even more customers will do without the “luxury good” of flowers.
Source: Stern
