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Overview of the evolving ACP–EU floriculture trade

18 January 2014

Kenya exports some €400 million in live plants and floriculture products to the EU, accounting for 7% of global trade in the sector. The EU market accounts for 84% of Kenya’s live plant and floriculture exports. In 2012, according to an EC report citing Eurostat figures, EU imports of live plants and floriculture products fell by 4.5% overall in volume terms, with import volumes falling across all categories since 2008. However, the value of EU imports in 2012 rose by 1.6% compared to 2011. The declining trend in import volumes continued into the first quarter of 2013, falling by 5.5%, with the value of imports also falling some 3.4%.

However, there has been a long-term growth trend in import volumes from Kenya and Ethiopia, mainly in the category of cut flowers. A slight dip in import volumes from Kenyan occurred in 2012, with import volumes from Ethiopia levelling off. Kenya and Ethiopia now represent 24% and 9% respectively of EU imports of live plants and floriculture products.

The main EU markets for imports are Germany, France, the UK and the Netherlands, with the Netherlands the centre of the cut-flower and foliage trade.

In terms of serving the EU market, Kenya’s main competitors are Colombia and Ecuador, which account for 17 and 9% of the sector’s global trade. However, Colombian exports are primarily destined for the US market (76%), and the USA is the destination for 38% of Ecuadorian exports.

Overall, Kenya’s main competitor in the global trade in live plants and flower products is in fact the EU. EU exports of live plants and floriculture products grew strongly from 2003 to 2008, dipped slightly in 2009 and then showed renewed growth. In 2012, the value of EU exports grew by 10.3% compared to 2011, with growth continuing into the first quarter of 2013 at 6.1%. The EU’s main export destination is Russia (23.9%), followed by Switzerland (19.3%), Norway (7.7%) and the USA (7.5%). China currently takes 3.5% of the EU’s live plant and floriculture exports. Overall, the EU has maintained a positive trade balance since 2002, amounting to €313 million in 2012.

According to press reports, Kenya has seen growth of 68% from 2010 to 2012 in its trade in live plants and floriculture products with Russia. The start of Kenya Airways’ direct flights to China is seen as opening up new opportunities for flower exports. Currently China takes 5% of Kenyan flower exports, with the possibility this will now rise to 10%, with China being seen as the “next high-volume importer of cut flowers”.

According to the Ethiopian Horticulture Development Agency, in the past decade Ethiopia has emerged as the second largest exporter of cut flowers in Africa and the fourth largest in the world: earnings for 2013 are projected to reach US$250 million. Although Indian investors are playing an increasing role in the sector, 90% of Ethiopian exports are still destined for the EU market. 

Editorial comment

While Kenya has been able to expand exports to Russia, it may face stiff competition from EU suppliers given that the EU is a major trader in live plants and floriculture products (trading five times the volume of Kenyan exports) and Russia is the EU’s main export market..

Less competition from the EU is likely to be faced on the Chinese market. This suggests that any Kenyan attempts at export development and market diversification could usefully be focused on the Chinese markets, where the start of direct flights opens up new opportunities.

In the short term, Kenyan floriculture exports to China are likely to be less subject to carbon footprinting requirements (see companion article ‘ Kenyan flower sector gets to grips with carbon footprinting concerns’, 19 January 2013), although finding a way around the Chinese market (particularly for value-added floriculture products like pre-packed bouquets) may prove challenging.

In terms of the EU market, if Ecuador joins the EU–Andean Pact FTA process or if EU GSP+ treatment is confirmed for Ecuadorian cut-flower exports, then current duties of between 8.5 and 12% would be waived. Ecuador is already the world’s second largest exporter of roses to the Dutch auction houses. Kenya is the lead exporter of roses to the EU, with a market share of about 38%. 

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