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May 25, 2009

Kenyan flowers hit by recession

Kenya's flower growers are suffering as demand for their crops, one of the country's flagship exports, has been hit by the global recession.

Earnings have shrunk by 35% this year compared to the same period last year, said the Fresh Produce Exporters' Association of Kenya (FPEAK).

Kenya sells more than 80% of its exported flowers to the European Union. Half of those are bought by the UK.

"There was a serious loss," said FPEAK chief executive Stephen Mbithi.

"But I think we might have seen the worst. There seems to be a stabilisation of demand, not to the same old demand, but at lower levels," Mr Mbithi said. "We don't expect to recover on the volumes of last year."

Kenyan flower growers are also facing a perfect storm of problems.

Exports were hit by volatile currency fluctuations - Kenyan exporters are paid in euros and pounds, but most of their costs are in dollars.

Kenya went through a drought last year that left farmers unable to plant their crops. In farms around the Mount Kenya area, rainfall did not even reach 30% of its normal level.

"It's still not anywhere near to normal," said Mr Mbithi.

"It should be down to global warming, which is affecting the pattern and the amount of the rains."


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