Ethiopia wants your dollars
December 19, 2017 at 2:57 pm #17142
Ethiopia’s burgeoning flower-growing industry is setting its sights on the U.S. in a bid to break the dominance of Latin American producers in supplying roses and other blooms to the world’s largest economy.
State-owned Ethiopian Airlines Enterprise is evaluating freighter flights through Miami — the main entry point for U.S. flower imports — Los Angeles or New York, regional manager Girum Abebe said in an interview. The company currently transports stems there only in the bellies of passenger jets.
Ethiopia has become a major force in global floriculture in the past two decades, exploiting a tropical high-altitude climate that provides year-round natural light combined with hot days and cold nights perfect for bringing plants into bloom. The conditions mirror those found in the Andes, where growers in Ecuador and Colombia currently dominate flower exports to the U.S.
“Ten or 15 years ago Ethiopia was not exporting a single rose, but now we have earned our position in the world market,” Girum said. “North America has been the major importer of horticulture products from other parts of the world, so we want to have part of that.”
Ethiopian flower exports are currently focused on Europe, and have made the country Africa’s second-biggest producer after Kenya and fourth-equal worldwide, according to Rabobank research based on 2015 figures. About 80 percent of Ethiopian production is flown to the Netherlands, the center of the global flower trade, and re-exported from there.
“Most people don’t know it but the flower market is very much a global one,” Amsterdam-based Rabobank floriculture analyst Cindy van Rijswick said. “Ethiopia is doing so well because its labor costs are a bit cheaper than Kenya and if anything its climate is even better, producing bigger blooms.”
European flower sales have been flat in recent years, encouraging growers to look at opportunities for penetrating trans-Atlantic markets, she said.
The expansion of North American flights will require a revision of existing air-service treaties between Ethiopia and the U.S. and Canada, said Girum, who spoke in Buenos Aires and oversees his company’s Latin American business. The African Growth and Opportunity Act, aimed at fostering U.S. trade with the sub-Saharan region, has helped encourage flower exports on a limited basis and was extended for 10 years in 2015.
Ethiopia aims to boost foreign-exchange earnings from flowers and other plants to more than $1 billion a year from $280 million now, according to the Ethiopian Horticulture Producer Exporters Association.
In order to achieve that the government plans to release a further 6,100 hectares of land mostly dedicated to floriculture — almost four times the amount currently under cultivation — while opening up the market to foreign development, according to EHPEA executive director Tewodros Zewdie. Dutch, German, French and Kenyan groups, as well as local ones, are undertaking studies and so far there’s “committed interest” for 1,500 hectares, he said.
Flower growing has also attracted tax breaks and state-backed loans as it becomes more important to a country that generally lacks access to foreign-traded currency. The sector has faced security challenges over two years of sporadic anti-government protests, with up to a fifth of farms facing attacks, though with the ending of a state of emergency the situation has eased.
Ethiopian Airlines, Africa’s largest carrier, handles 90 percent of horticultural exports via Addis Ababa’s Bole International airport, where a new 150,000-square-meter cargo hub has capacity for 1 million metric tons of sensitive produce annually, including fresh flowers. The airline has a fleet of six Boeing Co. 777F freighters and last month ordered four more at the Dubai Air Show worth $1.3 billion at list prices.
A new passenger route to Buenos Aires will operate five times weekly starting March 8, with aircraft flying via Sao Paulo. Ethiopian is also evaluating a further direct service to a Latin American destination, Girum said, while declining to comment further.
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