A four per cent import duty levied on Kenyan flowers has slowed effort to develop an alternative market in China despite a direct aviation link between the two countries.
China, alongside Australia and Japan are among the key markets that Kenyan exporters have been looking to in their efforts to diversify beyond the European Union market.
“The four per cent duty has made our flowers more expensive in China market compared to the EU countries where we sell duty-free,” Kenya Flower Council chief executive Jane Ngige at this year’s International Flower Trade Expo that was opened in Nairobi on Wednesday. About 300 exhibitors and 5000 flower dealers attended the event.
“We are calling upon the Kenyan government to negotiate the removal of the tariff with China the same way flowers from Ethiopia access its market duty free,” Mrs Ngige said.
Flower is a highly perishable good that must be sold two days after harvest. The national carrier, Kenya Airways #ticker:KQ enjoys a 13-hour direct flight to three Chinese cities — Beijing, Shanghai and Guangzhou.
On July 1 2010, China removed tariffs charged on 60 per cent of goods that it imports from Kenya and 32 other developing countries but retained the levy on cut flowers.
The tax has thwarted aggressive marketing effort aimed at penetrating the 1.3 billion-people market.
Mrs Ngige said the Kenya Flower Council members and traders visited China and exhibited flower products in bid to establish sale contacts.
“China is an exciting market and we are equally interested in deepening our foot prints in the larger Asian market,” she said.
Last year, Kenya exported flowers worth Sh70.83 billion, majority of it destined to the EU markets where still enjoys a duty and quota-free export arrangement despite delay in concluding the Economic Partnership Agreement. Kenya also has a duty free flower arrangement with Japan.
Mrs Ngige said the industry’s export diversification drive also targets markets in other Asia and Far East countries adding that China which produces long flowers would be a favourite for the Kenyan roses.
“Over the years as volumes of flower industry and market grows, regulators should give it ample time. We, for instance, expect the Kenya Plants Health Inspectorate Service (Kephis) to expand its operations by adopting a 24 hours’ work cycle,” she said.
At the moment, Kephis issues 1000–Psyco-sanitary certificates daily to exporters of fresh produce.
The KFC wants the agency to create more time for issuing certificates, inspecting and verifying destinations before flowers leave airport “as it is discomforting when one’s products have been duly inspected in a hurry, ends in one destination and paper work in another destination.”