Major boost for Kenyan flower farmers as UK suspends export tariffs
Business
By
Brian Ngugi
| Apr 11, 2024
Kenya's flower sub-sector on Thursday received a major boost after the United Kingdom temporarily removed export tariffs for cut flowers, with the aim of making trade easier and cheaper for growers in East Africa and beyond.
Following the move, unlimited quantities of flowers can now be exported to the UK at 0% tariff, even if they transit via a third country.
This is particularly important for flower growers in East Africa who transport their blooms via third countries or auction houses in the Netherlands before they arrive in the UK.
"The move aims to increase trade and further strengthen the economic relationship between the UK and the region. UK consumers could win big too - on price, seasonality and variety," the UK government said in a statement released by the British High Commission.
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It added that the suspension of eight per cent duty on cut flowers applies across the world but will be a big win for major flower-growing regions in Kenya, Ethiopia, Rwanda, Tanzania, and Uganda.
The duty suspension will remain in place for two years from April 11, 2024 to June 30, 2026.
"The UK's relationship with East Africa is rooted in mutually beneficial trade. This additional flower power will allow trade to bloom," said UK Trade Commissioner for Africa John Humphrey.
"We go far when we go together... or in this case, we grow far when we grow together, further reinforcing the UK's commitment to the expansion of trade in East Africa."
In 2022, Kenya was ranked as the fourth biggest exporter of cut-flowers in the world, with six per cent of global cut-flower exports, according to the UK trade office.
Ethiopia is the second largest cut flower producer in Africa, making up 23 per cent of Sub-Saharan African exports.
The UK move comes barely three months after Kenya secured a major deal with the European Union, allowing for duty-free and quota-free access to the EU market.
The deal was signed at State House in Nairobi earlier this year during a ceremony led by President Ruto and European Union Commission President Ursula von der Leyen.
Lawmakers at the EU Parliament voted in late February to ratify the deal, which will give Kenya free access to its biggest market where it sends roughly one-fifth of all its exports.
The EU is Kenya's second-largest trading partner, with total trade in 2022 at EUR3.3 billion (Sh545 billion), an increase of 27 per cent compared to 2018.
Imports from the EU to Kenya such as chemicals and machinery will receive progressive tariff reductions over a period of 25 years, but some sensitive products will be excluded.
Kenya's main exports to the EU are agricultural products, including vegetables, fruits as well as tea and coffee.
Over 70 per cent of Kenyan flowers are sold in the European Union through the Netherlands and United Kingdom, according to the Kenya Flower Council.
About 40 per cent of annual sales made by Kenyan flower farms to European markets are conducted during Valentine's season, which is celebrated in February.
While Valentine's Day is celebrated on February 14 every year, players in the sector start shipping flowers to European markets from mid-January.
Kenya generated Sh110 billion in sales in 2021.