Boost for flower farm**s as UK suspends 8pc duty

Friday, April 12th, 2024 04:30 | By
Assorted rose flowers. PHOTO/Pexels

Kenya’s horticulture sector players have scored a short-term win after the United Kingdom temporarily removed the 8 per cent global duty previously levied on cut flowers in a move poised to strengthen trade ties between the two countries.

This tariff reprieve, effective for the next two years, brings substantial relief to cut flower producers in Kenya.

The decision comes amidst a period of flourishing trade between the two nations, with the total trade in goods and services reaching £1.4 billion (Sh227.2 billion) in the four quarters leading up to the end of Q3 2023.

This strategic move is expected to further catalyse the Kenya-UK trade dynamics, facilitating an upsurge in the export of Kenyan cut flowers to the UK market.

John Humphrey, His Majesty’s Trade Commissioner for Africa, in a statement from the British High Commission, affirmed the temporary removal of the global tariff, saying it will streamline trade in the commodity with the UK, making it more accessible and cost-effective for growers in East Africa and beyond.

“Unlimited quantities of flowers can now be exported to the UK at 0 per cent tariff, even if they transit via a third country. This is particularly important for East African flower growers who transport their blooms via third-countries or auction houses before they arrive in the UK,” Humphrey stated.

This decision is anticipated to result in significant savings for Kenyan exporters, estimated at over Sh1.5 billion (£10 million) annually in duties on products such as green beans and cut flowers.

In the fiscal year 2023 alone, Kenya exported billions worth of cut flowers to the UK. The suspension of the duty will remain in place for two years from April 11, 2024, to June 30, 2026. “The UK’s relationship with East Africa is rooted in mutually beneficial trade. This additional flower power will allow trade to bloom. We go far when we go together...or in this case, we grow far when we grow together, further reinforcing the UK’s commitment to the expansion of trade in East Africa,” said Humphrey.

Economic ties

The UK’s decision to suspend the 8 per cent global tariff on cut flowers is poised to have a profound impact on the trade relationship between the two countries. This move is anticipated to stimulate trade and fortify the economic ties between the UK and Kenya.

Furthermore, it is expected to benefit UK consumers by offering more affordable products. Kenya’s ranking as the fourth-biggest exporter of cut flowers globally in 2022, with six percent of global exports, highlights the significance of this policy change. The removal of the tariff has the potential to narrow the trade deficit between the UK and Kenya. With Kenyan flowers becoming more competitively priced in the UK market, exports from Kenya are likely to increase. This will not only enhance the earnings of Kenyan farmers and horticulture investors but also rebalance the trade dynamics between the two nations.

However, the effectiveness of this policy change will depend on various factors, including the response of UK consumers to the price adjustments, the capacity of Kenyan exporters to meet heightened demand, and the reactions of other countries exporting flowers to the UK.

The trade relationship between the UK and Kenya has seen a significant upswing in recent times. The total trade in goods and services (exports plus imports) between the two nations reached £1.4 billion (Sh227.2 billion) in the four quarters leading up to the end of Q3 2023. This marks an increase of 11.1 per cent or £140 million (Sh22.2 billion) in current prices from the four quarters to the end of Q3 2022. The decision further strengthens the UK-Kenya Strategic Partnership, which is an ambitious five-year agreement that is unlocking mutual benefits for the UK and Kenya.

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