Kenya's cut flower growers have expressed concern over the strengthening of the Kenyan shilling which they said is hurting the industry.

The Kenya Flower Council (KFC), an association of flower growers, described the appreciation of the shilling as abnormal, saying it had not yielded the expected benefits on the inputs side.

"The cost of fertilizers, packaging material and other farm inputs have not changed despite the strengthening of the shilling, " said Erastus Mureithi, the KFC chairman.

The council has called on the government to intervene and stem the strengthening shilling, adding that already the industry has lost over 20 percent of its annual revenue.

He appealed to the treasury officials to work at an exchange rate that is good for both exporters and importers and hoped that the shilling will depreciate to 80 shillings to the dollar if the industry is to make profits.

KFC said the flower industry has had to contend with high fuel prices caused by turbulence in the global oil market.

Mureithi blamed the Central Bank for the shilling's rise, saying the country had accumulated more hard currency than it need.

The money has been earned from tourism, tea and horticultural exports.

"This is ironical because a growing economy such as ours should consume more dollars than it earns due to high import bills," he said.

Kenya has the fastest growing flower industry in the world.

Expanding at a rate of 200 hectares a year according to trade and industry ministry, the sector is the third largest foreign- exchange earner in the country after tourism and tea.

Analysts have attributed the growth in the industry to easy access to the European market under non-reciprocal trade agreements.

But they warned that unless preferential trade access to EU markets is renegotiated, the future of the industry could be in the hands of a few powerful exporters.

However, Head of Trade of the European Union Delegation in Nairobi Harvey Rouse allayed fears that the flower growers and exporters could lose out in the current Economic Partnerships Agreements.

He said the new terms will not affect flower exports to the EU negatively as it has been portrayed.

The KFC has been warning that "we are likely to see an exodus of foreign-owned flower exporters to Ethiopia if we lose the preferential trading status."

Mureithi said that Ethiopia has cheaper production costs and the government has instigated a campaign to attract foreign investors with promises of cheap labor.

He maintains that without preferential trade status, Kenya's flowers cannot compete in Europe where the country has commanded 25 percent of the total flower sales since 2000, ahead of Israel and Columbia, the second and third largest suppliers to Europe respectively.

Source: Xinhua