Uganda flower farmers facing tough times as exports and earnings drop

Sunday February 21 2016

A worker from Victoria Flower Ltd arranges

A worker from Victoria Flower Ltd arranges flowers for export. The sector is facing difficult times. PHOTO | MORGAN MBABAZI 

By DOROTHY NAKAWEESI

Uganda’s floriculture is experiencing a drastic drop in sales due to increasing competition and an export ban by the European Union.

The latest information from the Uganda Flower Exporters Association (UFEA) — an umbrella body of 15 companies — shows that the rose segment of the sub-sector is the most affected. Uganda’s floriculture exports mainly comprise roses and chrysanthemum cuttings.

UFEA statistics show that in 2014, Uganda exported 6,810 tonnes of flowers, down from the 7,364 tonnes recorded the previous year — an 8.1 per cent drop.

During this period, the revenue earned from the exports went down by 18.8 per cent; in 2013 the country realised $46 million, and in 2014 this figure was down to $38.7 million.

This is worrying for a sub-sector that directly employs over 8,500 people, 80 per cent of them women.

Olav Boenders, managing director of Wagagai Ltd, the leading producers of cuttings, said, “The rose segment is in dire straits. The strong dollar and the lower rose prices in Europe are making it very difficult to grow roses in Uganda.”

Some European Union markets rejected Ugandan roses following the discovery of moths in the roses two years ago.

In 2014, the EU issued a notice following an increase in the number of interceptions of Ugandan horticultural exports. Roses were among the commodities on the list of rejected exports.

According to the EU, exporters from Uganda failed to comply with the phytosanitary certification requirements.

“We are still suffering from the impact of that notice,” UFEA executive director Juliet Musoke told The EastAfrican.

Ms Musoke added that the sector is also performing poorly because of stiff competition from Ethiopia, which ventured into the sector much later but has gone in for production on a massive scale.

Ethiopia currently exports 400,000 tonnes and ranks as the continent’s second biggest producer of roses after Kenya. According to data from the Ethiopian Horticulture Producers and Exporters Association (EHPEA), this year alone the country expects $550 million from exports. 

Ethiopia’s business climate favours the sector as flower growers are entitled to a five-year tax holiday and tax exemption on inputs. Flower farmers in Uganda pay a 30 per cent levy on inputs.

Ethiopian flower farmers also have access to bank loans and free government land as well as a 100 per cent exemption from Customs duties.

Ethiopia is positioned as the second-largest flower exporter in Africa after Kenya, with over 100 grower companies on 1,700 hectares. Land under commercial floriculture in Kenya is 2,500 hectares, while in Uganda it is only 250 hectares.

Moreover a prolonged dry spell since December last year adversely affected the country’s earnings from Valentine’s Day orders.

Valentine’s has always been one of the peak seasons for rose exports to the EU. In 2013, Uganda exported more than 145 tonnes to the Netherlands — Europe’s main flower auction market — up from 130 tonnes in 2012.

According to statistics from UFEA, flower cuttings exports in 2014 were 2,051 tonnes, down from the 2,646 tonnes exported in 2013.

Uganda’s floriculture is the third largest non-traditional export product after gold and fish. 

Information from UFEA shows there has been an average annual growth of 20 per cent in flower production in Uganda over the past eight years, but in the past two years, the industry has suffered a fall in both value and volumes of exports.