Macrines Nyapendi
7 January 2009
Kampala — Ugandan flower export earnings have been sapped by the spills of the global financial crisis which has lead to the cancellation of contracts and prices nose diving.
Juliet Musoke, the executive director of the Uganda Flower Exporters Association (UFEA) said some European buyers have gone bankrupt due to the crisis.
"Some of our buyers have closed down due to insolvency while others have not expressed interest in signing up new contracts. The prices have also dropped to very low levels that some growers find it unnecessary to ship because the prices offered do not even cover freight charges," Musoke said.
UFEA had earlier on projected a 1,441 metric tonnes increment for export tonnage and $42m earnings this year. There are 20 flower farms employing over 12,000 people of which 80% are women.
The sector last year earned $32m from 6,559 tonnes and contributed $20 to the economy through taxes.
The Netherlands, the world's biggest flower exporter, has seen its bloom trade wilt as luxury items get passed over for essentials amid the global economic downturn.
Battered consumer confidence has curbed sales of luxury products like flowers and plants in the Netherlands' three main export clients: Britain, Germany and France, said the HBAG. HBAG is the registration board for all the Dutch agricultural wholesale board for flowers and plants.
Musoke said what is more worrying is that all stakeholders are worried because nobody knows what is going to happen and consumers are continuing to tighten their spending on non essentials.
The meltdown is among the three major shocks that have gripped the sector that has already been battling high production costs, storms and air freight charges that are eating into their earnings.
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