Price surge in rose market linked to low production in East Africa

EAST AFRICA – Recent reports indicate that rose production in key equatorial regions has sharply declined, particularly affecting East African and Latin-American producers.

This limited availability has triggered a rise in market prices, highlighting the basic economic principles of supply and demand.

According to Aart Buizer of Fresco Flowers, the current situation is a clear example of how production shortages lead to increased prices. “When main rose production areas around the world face lower output, the market experiences shortages, resulting in price hikes,” Buizer explained.

In July and August, Royal FloraHolland auctioned approximately 10% fewer roses from East Africa compared to the previous year.

Kenya struggled due to an extended cold period with minimal sunlight. Buizer noted that while rainfall levels appeared average, it occurred in a shorter time frame than usual.

“The most significant impact on production stemmed from a combination of cold nights and a lack of sunshine. This weather pattern typically characterizes the Kenyan winter but lasted longer this year,” he said.

Despite these challenges, Buizer remains optimistic about the future. “The prolonged low production, combined with steady demand for flowers, has resulted in significant price increases. Thankfully, we are witnessing a slow rise in production. I anticipate we will return to normal production levels within the next two to three weeks, which will alter the supply-demand dynamic and likely lead to lower prices.”

Alongside production issues, both Kenya and Ethiopia are also grappling with the threat of the False Codling Moth (FCM).

This pest requires inspection for 10% of all roses entering Europe, directly impacting the Dutch trade, which is the largest importer of Kenyan roses.

“In Kenya, some nurseries have dealt with FCM issues that hindered their ability to export, exacerbating the already existing shortages,” Buizer added.

The flower industry plays a crucial role in the economies of both Kenya and Ethiopia. In Kenya, it generates approximately USD 1 billion annually, contributing around 1.25% to the nation’s GDP.

The sector directly employs over 100,000 individuals and indirectly supports about 2 million livelihoods. Key flower-growing areas include Lake Naivasha, Mt. Kenya, Nairobi, Thika, and Nakuru.

Kenya leads the European cut flower market, holding nearly 40% of the market share, with Europe accounting for about 70% of its exports.

Ethiopia also contributes significantly to the flower industry, with its exports valued at around USD 230.7 million in 2018, representing 2.6% of the global market share.

The Ethiopian flower sector employs over 8,500 people directly, a substantial number of whom are women.

East Africa, particularly Kenya and Ethiopia, holds a noteworthy position in the global flower market. Kenya ranks fourth globally with a 6.4% market share, while Ethiopia follows in fifth place with 2.6%.

The primary export destinations for East African flowers include the Netherlands, the United Kingdom, Germany, Russia, and Norway.

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