Kenyan flower exporters are hoping a new Kenya-China technical working group will clear the way for lower tariffs and open a larger route into the Chinese market. The talks, reported on 20 November 2018, are aimed at removing a 4 per cent duty on most Kenyan exports to China.
Trade Cabinet Secretary Peter Munya said the two sides were set to begin formal discussions the following January and wanted them completed by the end of February. He said the goal was to eliminate the tariff so Kenyan products could compete more effectively.
The current push follows earlier trade changes. In July 2010, China scrapped tariffs on 60 per cent of imports from Kenya and 32 other developing countries, but kept the levy on cut flowers. Beijing and Nairobi also signed a memorandum of understating to support exports of more than 40 per cent of Kenya's fresh produce to China, a market of over 1.3 billion consumers.
For now, Kenya’s flower industry remains heavily exposed to Europe, where most cut flowers are sold through the European Union. Many shipments to China still move through the Netherlands-based international flower auction, even as Kenya already enjoys duty and quota-free access to the EU and duty-free flower access to Japan. In the region, Ethiopia is the only country with duty-free flower access to China.
Guo Ce, the economic and commercial counsellor at the Chinese embassy in Kenya, said the arrangement would help agricultural exports from Kenya reach Chinese shelves. He added: “This agreement will facilitate export of agricultural products from Kenya to China. We would love to see more of Kenya's products on our shelves,”
The sector, which earned $822.5 million last year, sees the negotiations as a chance to widen sales and reduce tax pressure in China. Clement Tulezi, the chief executive officer of the Kenya Flower Council, said he had not seen the signed documents but welcomed the effort to secure better trade terms.
“I haven’t seen the actual documents signed but we are interested in expanding our footprints in China. Currently our flowers are being charged higher taxes in China, which makes them uncompetitive. We hope that the government will negotiate favourable trade protocols and agreements with China,” Clement Tulezi said.
Bobby Kamani, managing director of Primarosa Flowers Ltd, said the government’s engagement with Beijing was a positive step for the industry. He said Kenyan growers had received an unexpectedly strong response during a China expo, where they met buyers who had traditionally dealt with Ecuador and Colombia.
Kamani said Primarosa had shifted its sales model so that more than 70 per cent of its business now goes directly to individual buyers, with the remaining 30 per cent sold through auctions. He believes the Chinese market can support that approach.
Chinese importers have also been adjusting their systems to cut costs, including using a single import and centralised distribution model that allows multiple batches to be brought in at once and redistributed through warehouses across China. That structure also helps lower tax obligations.
Interest in Kenyan flowers has been rising in China, and Jiuye Supply Chain in Guangzhou has become one of the key contact firms used by Kenyan exporters. Qi Bo, director of the company’s supply chain department, said Kenyan flowers stood out because of their variety and vase life.
He said demand was growing by 25 per cent annually and predicted imports from Nairobi could double to five million stems by the end of the year.
Logistics remain a constraint. Kenya Airways, through its code share with China Southern Airlines, is the only carrier flying directly to Guangzhou. Other routes include Ethiopian Airlines through Addis to Shanghai, with a two-hour transit time, while Gulf carriers are more expensive because of connections.
