Kenya's 2012 Flower Export Earnings Seen Lower

By Beatrice Gachenge | Reuters – Wed, Mar 21, 2012

http://news.yahoo.com/kenyas-2012-flower-export-earnings-seen-lower-145939300.html

NAIROBI (Reuters) - Kenya's flower export earnings are expected to fall about 11 percent this year due to poor weather and a stronger local currency compared with last year, a top official said on Wednesday.

Kenya is the world's third-biggest flower producer, growing mainly red roses. Flower exports account for nearly half of the country's horticulture export earnings - the east African country's second biggest source of foreign exchange.

Jane Ngige, the chief executive officer of Kenya Flower Council, told Reuters on the sidelines of a flower exhibition that a weak Kenyan shilling helped push up flower revenues last year. East Africa's biggest economy saw its currency drop about 25 percent last year to a record low of 107 to the dollar, but it has recovered 23 percent since then to around 83, after an aggressive tightening of monetary policy by the central bank.

Flower sector earnings rose 25 percent last year to 44.5 billion shillings, partly powered by the relatively cheaper shilling, data from the USAID Kenya Horticulture Competitiveness Project showed.

"This year, we expect more stability of the Kenyan shilling, therefore we do not really see that we will do the 44 billion shillings," said Ngige.
"About 40 billion shillings would be feasible to look at."
Kenya exports of most its horticultural produce to Europe, whose sovereign debt crisis drove many countries to the brink of a recession at the start of 2012. "The economic situation in Europe is not really affecting us negatively. They seem to be managing it, but so far we haven't felt the impact," Ngige said.

Last year, Kenya's horticulture exports, contributing about 11 percent to the country's gross domestic product, rose to 91.6 billion shillings.
To try to cope with the anticipated downturn, Ngige said the country was looking to diversify its markets into Asia and eastern Europe to drive growth.  Ngige said she was worried about the delay to long rains that usually begin in March, which could slash flower output this year, especially if the unfavourable weather continues.

"It's hard to project with the delayed rains, but we are likely to maintain production at around 100,000 tonnes this year," she said.  Last year, the industry produced 109,950 tonnes of flowers. Kenya's Meteorological Department said earlier this month the long rains (March-May) were expected to commence this month and be at near-normal levels in key farming areas. So far there has been scanty signs of the rains.