Kenya’s flower industry stands to lose $7.3 million in sales in a second wave of massive losses that could trigger another round of job cuts as orders from key European Union markets slump due to a Covid-19 resurgence, according to the Kenya Flower Council (KFC).
After incurring $300,000 losses a day during the first wave of Covid-19 between April and July — flower firms laid off about 80 percent of their employees and airlines too felt the impact of low or lost cargo business.
The industry is bracing for another tough period as countries go into lockdown.
The KFC said traders in the EU who import about 70 percent of Kenya’s flowers have cut down on orders while prices are down by 20 percent as key markets including the United Kingdom and France institute lockdown measures to stop rising Covid-19 infections.
France has ordered supermarkets to stop the sale of ‘’non-essential’’ items like flowers while florists cannot operate during the lockdown expected to last until at least December 1.
French Prime Minister Jean Castex announced on November 1 that shops that sell clothes, toys, jewellery and, all florists, which are deemed as “non-essential” will no longer have sales in supermarkets from November 3.
“As countries have in the past four months gradually lifted the lockdowns and eased restrictions, demand for cut flowers picked up in most destinations. However, the second lockdown in Europe will erode gains made and set it back downhill,” said Clement Tulezi, KFC chief executive.
He added that the industry was calling on the government to engage the French government to lift the restrictions to safeguard jobs for thousands of workers who are likely to be the first casualties.
Kenya Airways managing director Allan Kilavuka said the resumption of lockdowns in the EU meant a decline in number of travellers. This has, a result, has forced the airline to reduce the frequency of flights, in the process affecting both passengers and cargo business.
“We have reduced frequency of frights affecting the capacity of cargo particularly flowers because of reduced orders,” Mr Kilavuka said.
Flowers constitute a major foreign exchange earner for Kenya, raking in $1.31 billion in 2019 and accounting for 20.6 per cent of the total exports according to the Kenya Economic Survey 2020.
The earnings represented a 5.9 per cent decline compared with $1.39 recorded in 2018.
About 65 percent of the country flower exports are sold at the world’s largest flower auction in the Netherlands, with the UK, Germany and France as primary markets the Horticultural Crops Directorate reported.
The flower export industry ranks among the top for foreign exchange earners for Kenya and employs over 200,000 directly on the flower farms, while over one million people benefit indirectly from this industry.
At the height of the first Covid-19 wave, about 30,000 casual workers lost their jobs while over 40,000 permanent staff were sent home on unpaid leave.
Kenya is trying to stop its over-reliance on the European Union market by cultivating new buyers in the Japan, Australia and China markets while efforts are ongoing to increase presence in promising markets like Russia, Turkey, South Korea and India.