Roses are red, florists are blue, flowers may get cheaper and importers could profit too!
First published on medium.com
It's Valentine's day! And what's Valentine's day without a big bouquet of roses for a loved one?
This Valentines could mark a significantly profitable change for flower importers across the United Kingdom.
The UK imports the majority of its flowers from Holland. An estimated £2.5B is spent annually at the flower auction in Holland, named the Royal FloraHolland.
Florists and flower importers have become increasingly worried over the last few years due to the fear that a no-deal Brexit might result in a rise in import charges. However, there seems to be light at the end of this tunnel.
Since the UK's exit from the European Union, it's come to light that Kenya, one of the biggest, if not the most prominent exporter of flowers to the EU (with a global market share of about 38%) is keen on exporting directly to the UK. Exiting from the European Union grants the United Kingdom the ability to purchase its flowers directly from flower farms across the globe at more affordable, and negotiated prices, bypassing auctions like the Royal FloraHolland.
Kenya supplies up to 50% of the flowers sold at Dutch auctions, which is essentially where most UK suppliers source their flowers. Therefore, if the UK decides to strike a trade deal with Kenya, we could see a massive drop in prices for importers, which would, in turn, lead to a lower cost in flowers and more profits for florists in the UK.
At the start of this year, British Prime Minister Boris Johnson met with the President of Kenya, Mr. Uhuru Kenyatta where he held talks on further strengthening ties and discussing trade relations between the UK and Kenya after Brexit. The Prime Minister seemed very optimistic, as he acknowledged that Kenya was a vital trade partner in Africa.
With the UK looking to expand trade into Africa, flower importers need to start planning and thinking about using a currency specialist to trade illiquid currencies. Kenya's national currency is the Kenyan Shilling which is an exotic currency. Banks and other global currency corporations offer costly exchange rates for trading with exotic currencies due to their illiquidity
Trading with a currency specialist will help provide you with a market rate that is cost-effective and nearer to the mid-market (or interbank rates) price to help you fully capitalise on the profits this new potential trade deal could bring.
If you need any help with your next currency purchase or planning your upcoming invoice, get in touch, and we'll be more than happy to assist you.