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The floriculture is hit hard by the COVID-19 crisis, but when looking at the past, present and future, how is the industry expected to develop and recover? Rabobank tried to predict the global economic impacts and the effects on the floriculture industry. Lambert van Horen, Analyst - Fresh Produce at Rabobank, a Dutch bank with clients all over the world, was present at the PMA Virtual Town Hall*, to give an insight in the scenario they outlined.
Western world hit hard
When looking at the macro-economic baseline scenario, it is expected that a lockdown in a country takes about 3 months, that countries will reopen gradually - for many this will start in May -, and that it will take about 3 quarters to get back to the ‘normal’, without restrictions, van Horen explains.
When looking at the global GDP, the impact for 2020 is expected to be -2.6%, with The Western world being hit hard. “China and Asia (excl. China) are the only ones expected to have a (small) positive economic growth in 2020. Fortunately, for 2021, Rabobank expects the global GDP to grow with +5.3%.”
Read more: It will take 4 to 5 years before the industry is back at the 2019-level
With the world’s human population expected to reach nearly 10 billion by 2050 and the negative impact of climate change on agriculture, maintenance of a stable global food supply is under significant threat.
The EU continues to set and re-set pesticide and fungicide Maximum Residue Level (MRLs) at far stricter levels than internationally agreed standards. ACP exporters serving EU markets have no option but to comply or exit the EU market. Freshfel’s call for ‘better defined international standards’ to facilitate EU fruit and vegetable exports, since uneasily with the unilateral standard setting practiced by the EU, which regularly presents new compliance challenges for ACP fruit and vegetable exporters. This raises important policy issues regarding the EU’s role in the de facto setting of international standards and the limitations of SPS chapters and institutional mechanisms established under trade ACP-EU FTAs for ensuring EU markets remain open to ACP products which comply with agreed international regulatory standards.
Read more: New EU MRLs Highlight the Difficulties in Securing International Consensus on SPS Issues
The current Covid-19 disruptions of Kenyan exports to Europe, particularly along triangular supply chains to the UK, highlights the importance of shortening supply chains by wherever possible, contracting with the final retailer and shipping products directly. For exporters who can get to grip with current logistical challenges, rising EU demand for fruit and vegetables and rising prices could yield commercial benefits to counter-balance some of the Covid-19 disruptions. This is particularly the case since labour shortages in the fruit and vegetable sectors as a result of disruptions to labour flows could depress fruit and vegetable production throughout 2020.
Read more: Covid-19 Related Cancellation of Commercial Flights
With nearly 40% of Kenya’s direct exports to the UK currently benefitting from significant margins of tariff preferences, concerns have arisen around the UK’s current MFN tariff review and the future basis for Kenya’s continued duty-free access to the UK market after 1st January 2021. In addition, there are growing concerns about the future commercial viability of the use of triangular supply chains for the delivery of Kenyan short shelf life products to the UK market if no comprehensive EU/UK trade agreement is in place by 1st January 2021. Any future EU/UK trade agreement would need, as far as possible, to replicate the current frictionless trade, on which the operation of these triangular supply chains depends. This is looking increasingly unlikely. The Government of Kenya thus faces a triple challenge in ensuring a continuation of current patterns of exports to the UK market into 2021.
Read more: Challenges Facing Kenya’s Duty Free Access to the UK Market?
Parties, functions an
d weddings have been called off and event planners pulled the plug en masse, cancelling all orders of flowers.
Flower farmer are staring at disaster if disruptions caused by the coronavirus pandemic continue to august. The pandemic has hit supply chains including major retailers and the event industry.
Local flower farmers discussed with the Floriculture Magazine the devastation the flower farming industry is experiencing due to lack of demand from consumers, cancelled orders from industry outlets and transportation line shutdowns.
“Almost the entire market has collapsed. Technically, our industry has been on lockdown for a while,” said a flower grower, whose business over the last one month has just disappeared.
Since the government declared the pandemic a national disaster and limited public gatherings to 15 people, flower producers ceased almost all of their operations.
Parties, functions and weddings have been called off and event planners pulled the plug en masse, cancelling all orders of flowers.
Read more: Economic impact of Covid-19 on local flower industry massive
His Excellency Daniel Toroitich Arap Moi, Farmer number one for those who grew up in 80s and 90s, a flower farmer and chairman to one of the fastest growing group in the sector, former president and crusader for agriculture as a whole, was promoted to glory on Tuesday, February 4, peacefully. He was 95. All the flowers used during the occasion came from his farms. It was a fitting salute to his dedication, not only to his farms, but to the industry he loved.
True be said, the industry lost an international investor the flower industry, an enthusiastic educator, a devoted volunteer and a friend to many.
The Flower industry is but one of many sectors who will feel an enormous void with Mzee Moi’s passing. “Mzee Moi was a prolific contributor of practical, easily relatable and accurate GAPs, both as government policy and as a farmer. In more than 20 years of working close to Mzee Moi’s farms, they are professionally run and most of the other farms have benefited immensely from their professionality. I have also learnt a lot every time I visit them.
