The ongoing Red Sea attacks on shippers by the Iran backed rebel group, the Houthis, could hurt Kenya's 2024 prospects for cut flowers exports.
According to sector players, the attacks have so far cut the shipment by about 20 containers a week, even as the country explores increased flower shipment to cut on air freight costs.
They spoke at the announcement of the forthcoming global flower trade Expo scheduled for Nairobi from June 4-6.
Dubbed the International Flower Trade Exhibition (IFTEX), the forum seeks to convene growers, exporters and buyers to address the current challenges impacting the space while at the same time enforcing collaborative engagements.
Kenya Flower Council (KFC) said the country is now shipping lows of five containers weekly compared to 25 containers last year.
“This could negate further the sectoral figures this year, and occasion losses for growers as as result of the re-routing along the Cape of Good Hope which is now taking ships additional 10-14 days. This is not viable for fresh cut flowers,” said Clement Tulezi, the CEO at KFC.
He said this is despite the sector’s ambitions to prioritise sea freight, it being a viable and a win-win option for all players.”
Tulezi said despite the challenges, Kenya remains committed to increase its volume of exports via sea by 50 per cent by 2030.
Fresh Produce Consortium of Kenya (FPCK) data shows the country exported 116,000 tonnes of cut flowers worth Sh73 billion in 2023 compared to 203,000 tonnes worth Sh104 billion in 2022.
This was the least volume the country has recorded since 2017 when it shipped 160,000 tonnes worth Sh82 billion to the international market.
Concern about high taxation towards the sector was also raised as a pressing challenge impacting the sector's prospects.
“Flower growers in the country pay up to to a total of 46 taxes every year, while at the same time, the government has failed to pay VAT refunds owed to the sector on time,” Tulezi said.
He said to date the government owes the sub-sector close to Sh12 billion in VAT refunds which has greatly affected the sector's liquidity and inturn production.
IFTEX forum the organiser Dick Raamsdonk, said Kenya, who is the leading flower grower in Africa has braved challenges facing the industry globally to continue producing the widest range of new varieties.