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Uganda: Flower Sector May Wilt As Clients Go Bankrupt

Just found this article on flowerweb (dated 8 January 2009):

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.

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.