Discussion Paper No. 96 of 2008 on A Cross Country Analysis of Cut Flower and Foliage Exports: the Case of Kenya

Abstract

In terms of volume and value, cut flowers are the single most important horticultural exports, followed by vegetables and fruits in Kenya. Floricultural trade in the country is export oriented with an end-user focus. There are three main consumption centres where the market value for cut flowers is high, these are: the Europe Union (EU), United States of America (USA) and Japan. Competition for the developed countries’ markets is high, suggesting that countries may be easily substituted. This study seeks to measure the comparative advantage of the Kenya’s cut flower and foliage exports in relation to its main competitors in these markets. The aim is to explore ways to improve its market share and strategy in the fast growing and dynamic cut flower industry. Cut flower and foliage export data for 1995 to 2006 from Kenya, Uganda, Tanzania, Ethiopia, Colombia, Ecuador, Israel and The Netherlands was used to measure Kenya’s revealed comparative advantage. Results show that in the EU market cluster, Kenya should focus on market penetration and product development. The Japanese market is a prime candidate for diversification and development of new, special and different products through co-operation with importers. In the USA market, the country should pursue new products and develop a market for the current products because the South American countries already have a comparative advantage. Finally, promotion and lobbying should be used to increase market share. It is important to strengthen the market infrastructure so as to develop new strategies for market intelligence and network formation for the EU, USA and Japan markets. Secondly, adapt geographical indications for Kenyan products which are viable marketing tools. Thirdly, encourage development of a domestic market for cut flowers. Fourthly, increase participation of smallholders in the production chain and finally, increase domestic support and safeguard cut flower exports by enhancing financing of the sector as envisioned in the Cotonou partnership agreement. Further, research is suggested on determining the market potential and competitiveness for Kenyan cut flowers in specific external markets.