African Producers in the Cut Flower and Foliage Trade Case

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Case 1: African producers in the cut flower and foliage trade

Floriculture trade involves the production, export and consumption of cut flowers and plants. In 2009 the total value of exported fresh cut flowers amounted to 6 500 000 billion US dollars according to International Trade Center (ITC). EU is the largest market for trade in fresh cut flowers in the world, the total EU flower market amounted to €13 billion. African floriculture has faced some growth, because a new trend has evolved where some of the production is carried away in to the developing countries. These countries in Africa include Ethiopia, Kenya, Zimbabwe and Ghana. The main market for African cut flowers and foliage is the European Union, because local markets are limited to purchases from hotels. Kenya was the biggest exporter in Africa in 2010 with $245 million. The biggest export destination for African exporters is the Netherlands, where flowers are sold via auction markets, or directly to wholesaler or retailer. Netherlands is also the worlds leading country in the cut flower trade. Over 60% of world trade in flowers and plants takes place via Dutch auctions.

African producers are facing some problems arising from the floriculture markets. The one main issue is that flowers are perishable so the logistics and distribution must meet certain criteria. High cost of freight is also one key factor limiting African exports, and that’s why African countries do less direct exports to wholesalers. Trends in the flower products are constantly changing causing problems for the uneducated African producers. Producers must take into account the fact that a flower is 90 percent water and it needs more water than conventional horticulture product. How can African countries have enough water for human consumption and for cultivation of flowers?

First of all African producers should stay on the same course where they are now, exporting cut flowers to Europe. Local markets are so small and flower culture is almost non-existent in Africa (excluding South Africa, which mainly produces its own flowers). Distribution to Netherlands is a wise move, sending large quantities to one destination minimizes the air freight costs. The location of the farm is also crucial. Farms should locate within a reasonable distance from airport, due to perishable products. Ghana is a great location for cultivation of flowers, good climate and a location, on the equator, to guarantee all-year round production. Refrigerated vans are also essential for transportation of fresh flowers. Countries/producers need to market themselves more for maintaining the presence of African production. The location for flower cultivation is perfect and all of the countries have cheap labor force which is a big plus due to the fact that flower cultivation can’t be mechanized.