An economic analysis of the major obstacles to optimal exploitation of Kenya's cut flower export market

Abstract

Horticultural produce export has recently improved both in volume and value. Among the fresh produce, cut flower have remained on top. Its' increase has been coupled with quality control, improved packaging and market diversification. This research paper attempts to analyse fluctuation of real exchange rate (RER), airfreight cost (AIReo) and tariff (T) and non-tariff barriers (NTBs) as the main obstacles hindering full exploitation of cut-flower export market. - Data collected was subjected to diagnostic test like test for stationary. OLS regression test have later been done to estimate the elasticities of these obstacles against the dependent variable, cut flower export value (XPT) over a twelve-year period RER and AIRCO are found to be statistically significant at 5% level. The dummy variable, seasonality is statistically significant at the first, third and fourth quarter. During the second quarter cut flower export is not statistically significant.