Kenya’s flower industry stands to lose $ 7.3 million in sales in second wave of massive losses that could trigger another round of job cuts as orders in major European Union markets collapse due to a resurgence of Covid-19, according to the Kenya Flower Council (KFC).
After suffering $ 300,000 in losses per day in the first wave of Covid-19 between April and July – flower companies laid off around 80% of their employees and airlines also felt the impact of a business low or lost freight.
The industry is bracing for another tough time as countries go into lockdown.
The KFC said EU traders who import around 70% of Kenya’s flowers have slashed orders while prices have fallen by 20%, with key markets including the UK and France instituting measures lockdown to stop the rise in Covid-19 infections.
France has ordered supermarkets to stop selling “non-essential” items like flowers while florists cannot operate during the lockdown which is expected to last at least until December 1.
French Prime Minister Jean Castex announced on November 1 that stores that sell clothes, toys, jewelry and, all florists, which are considered “non-essential” will no longer have sales in supermarkets from November 3.
“As countries have gradually lifted lockdowns and relaxed restrictions over the past four months, demand for cut flowers has increased in most destinations. However, the second foreclosure in Europe will erode the gains made and roll them back, ”said Clement Tulezi, managing director of KFC.
He added that the industry is calling on the government to urge the French government to lift the restrictions in order to safeguard the jobs of thousands of workers who are likely to be the first victims.
Kenya Airways chief executive Allan Kilavuka said the resumption of blockages in the EU meant a drop in the number of travelers. This, therefore, forced the airline to reduce the frequency of flights, thus affecting both passengers and cargo.
“We have reduced the frequency of scares affecting freight capacity, especially flowers due to reduced orders,” said Mr. Kilavuka.
Flowers are a major source of foreign exchange for Kenya, bringing in $ 1.31 billion in 2019 and accounting for 20.6% of total exports according to the Kenya Economic Survey 2020.
Profits were down 5.9% from the $ 1.39 recorded in 2018.
About 65 percent of the country’s flower exports are sold at the world’s largest flower auction in the Netherlands, with the UK, Germany and France being the main markets, the Directorate of Foods reported. horticultural crops.
The flower export industry ranks among the primary sources of foreign exchange income for Kenya and employs over 200,000 people directly on flower farms, while over one million people benefit indirectly from this industry.
At the height of the first wave of Covid-19, around 30,000 casual workers lost their jobs while more than 40,000 permanent employees were sent home on unpaid leave.
Kenya is trying to end its overdependence on the European Union market by cultivating new buyers in the markets of Japan, Australia and China, while efforts are underway to increase its presence in promising markets such as Russia, Turkey, South Korea and India.