For Floriculture Sector, Logistics Fragility Brings Industry Price Pressure

Apr 18 , 2026
By Mekonnen Solomon

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The floriculture sector is now forced to choose between defending its long-term profitability and maintaining its competitive edge as a reliable supplier of perishable goods. Relief measures could include volume-based incentives for certified shipments and government freight subsidies, similar to those employed during the Covid-19 pandemic, writes Mekonnen Solomon, (ehdaplan@gmail.com), a horticulture export coordinator and senior staff of the Ministry of Agriculture.

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For the domestic floriculture industry, the shock from the Israel/United States war against Iran has landed at a vulnerable moment. Ethiopian Airlines has long been the backbone of the flower export trade, helping position Ethiopia as a preferred source of perishable cargo through competitive freight rates, a wide global network, and connectivity stronger than that of regional peers.

This edge has enabled flowers, herbs, and horticultural products from Ethiopia to reach premium markets in Europe and the Middle East quickly and reliably, thereby supporting the sector’s competitiveness. It is a leverage that is now under pressure, reshaped by a security reality of the Middle East and Gulf region, sending ripples across the Horn of Africa. In response to rising operating costs linked to the security crisis, Ethiopian Airlines revised its cargo tariff structure for perishable exports, effective from April through December this year.

The change imposes a uniform 20pc increase on applicable tariffs for horticultural cargo. The Airline has presented the adjustment as a response to higher fuel, insurance and logistics costs. Yet the burden is substantial for exporters already working with narrow margins, especially in the 45Kg and 100Kg weight brackets, even though those tiers often cover smaller commercial flower shipments.

The Airline’s cargo pricing employs a tiered framework in which the per-unit cost of mass progressively lowers as the overall shipment size increases, a system designed to reward larger exports with greater logistical efficiency. This structure begins with a mandatory baseline fee for the smallest loads, then moves to a primary rate for standard shipments, followed by a sequence of descending price brackets that are triggered as cargo transitions from moderate weights to substantial commercial volumes.

By navigating these various thresholds, ranging from initial entry levels to heavy industrial tiers, exporters can forecast their margins and negotiate long-term contracts that underpin global trade.

However, the tariff increase presents a serious threat to the narrow profit margins on which many domestic producers depend. In a global flower market where competition is intense and price sensitivity is high, a rise of this size could test the operational viability of many farms. The effects are likely to spread across the horticultural value chain, forcing growers, exporters and regulators to look for ways to protect profitability.

This is not only a cost problem for exporters. It could also squeeze farms across the production chain, from established growers to smaller operators, at a time when the industry is being pushed to innovate, adapt and defend long-term profitability in global markets.

The increase applies to major European airport gateways such as Paris, Frankfurt, London and Brussels, as well as key Middle Eastern hubs including Dubai, Abu Dhabi, Doha and Riyadh. Although the revised prices remain net and include fuel, insurance, terminal handling and screening fees, the higher rates come at a difficult time for the industry.

The National Bank of Ethiopia (NBE) has recently revised floor prices for roses to 4.57 dollars a kilo for Highland varieties, 4.76 dollars for Midland, and 5.12 dollars for Lowland, alongside changes for summer flowers. Those benchmarks were set on the assumption of stable freight costs. Exporters now face a hard choice. They can try to negotiate higher selling prices with international buyers to meet repatriation requirements or seek alternative routes to reduce transport costs. Each option carries risk.

Higher prices could weaken market share. Rerouting could disrupt the cold chain and delay delivery, undermining one of Ethiopia’s main competitive strengths.

For more than two decades, the floriculture industry has grown on a model built around reliable lift capacity from Addis Abeba's Bole International Airport, freight terms that were long seen as competitive, and access to high-value overseas markets. The model has brought in foreign exchange and created jobs across highland, midland and lowland production areas. The tariff revision now exposes a deeper weakness. The industry is dependent on a single dominant carrier at a time when supply chains are becoming more fragile because of regional conflict.

The pressure is likely to fall hardest on producers already dealing with tight seasonal cash flows and on smallholder growers at the farm level if export volumes slip or quality comes under strain. Kenya’s flower industry offers a warning, reporting weekly losses of up to 1.4 million dollars due to lower demand and logistical disruptions.

Ethiopia’s flower export industry has repeatedly shown an ability to adapt. The current challenge is serious, but it could also push the sector toward a more durable footing. If the tariff increase is treated not as a one-off disruption but as a trigger for closer alignment among key actors, the industry will be better placed to protect jobs, preserve market position and keep Ethiopia competitive as a supplier of responsibly grown, high-quality flowers.

Ethiopian Airlines has shown its role in national development through large investments, including the new cargo facility in Bishoftu. The horticulture industry has also shown resilience in the face of earlier external shocks. That is why structured dialogue among Ethiopian Airlines, the Ministry of Agriculture, exporters’ associations, and the NBE is essential.

It is time to turn up the heat and take action, including volume-based incentives for certified shipments, targeted government freight subsidies during periods of geopolitical volatility, joint efforts to explore additional freighter capacity, stronger contract mechanisms to hedge against swings in currency and fuel prices, as well as other measures the government committed to during the Covid-19 pandemic. Flower buyers in Europe and the Middle East, who continue to value the reliability of Ethiopian supply chains, could also help share part of the higher logistics burden.

What happens over the next few months will matter. Close tracking of export volumes, price transmission and buyer feedback will show whether the tariff change is only a temporary reset or the start of a more structural shift in the economics of the domestic floriculture industry. I remain confident that a coordinated and data-driven response can help the industry overcome the shock and emerge on a stronger and more resilient footing.

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PUBLISHED ON Apr 18,2026 [ VOL 27 , NO 1355]

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