Uganda's '08 flower earnings rise 6.7 p.c.

Uganda exported $34.2 million in flowers in 2008 from $32.05 million in 2007, but expects earnings this year to fall on high input costs, low prices and weak demand, a flower body said on Wednesday.

Juliet Musoke, executive director of the Uganda Flower Exporters Association, said volumes rose 4.7 percent last year to 6,799 tonnes from 6,496 the year before.

Europe is the main destination for Uganda's flowers, which are mostly sweetheart roses and chrysanthemum seeds.

"It's going to be a very tough year. The cost of inputs is still high, the prices have been very, very difficult ... some firms have not been exporting," Musoke said.

"Last year, we had 6,799 tonnes, and the increase this year will be very slight," she told Reuters in an interview.

Uganda's growth is expected to slow this year on the global financial crisis to 7-7.5 percent from an 8.1 percent projection, according to the International Monetary Fund (IMF).

The east African nation is the continent's second biggest coffee exporter, and is also a major exporter of fish.

Flower exports peaked in 2005 at 7,520 tonnes worth $34.86 million, but have since fallen after record oil prices, bad weather, low prices and a political crisis in neighbouring Kenya where Uganda imports most of its inputs, Musoke said.

Uganda exported 6,870 tonnes of flowers in 2006 and 6,496 in 2007, according to the association's data. "2007 was a rebuilding year," Musoke said. "Volumes are still a problem."

Uganda has around 20 flower farms employing 6,000 to 6,500 workers on 216 hectares of land, Musoke said.

"This year, there's going to be no expansion," she said.

The flower industry needs access to low interest loans, long-term repayment plans, limited grants and discounted leases for land to be more competitive against flower powerhouses like Kenya, Musoke said.