Effects of International Fuel Prices on Performance of Floriculture Business in Kenya: A Case of Flower Farms in Naivasha

Abstract

In the past few years, fluctuations in fuel prices have been common and have greatly affected performance of various segments of the economy especially in transport. Cut flower industry in Kenya relies heavily on export markets in Europe and America. Changes in fuel prices have also been very common in the recent past. The general objective of the research was to establish the effects of the fuel prices on performance of floriculture business in Kenya. The study was conducted among flower firms in Naivasha District in Nakuru County, Kenya. The study used a descriptive research design where the study population composed of finance and marketing managers of 32 flower farms in Naivasha District. All the members of the target population selected to participate in the study through census design. The study utilized both primary and secondary data. Secondary data was obtained from banks and oil firms.  Primary data, on the other hand, was collected using the questionnaire designed by the researcher based on the study objectives. Quantitative data was analyzed using descriptive statistics such as percentages and frequencies. Further statistical inferences and hypothesis testing was done using spearman correlation analysis.  The study revealed that fuel price fluctuations were a common phenomena in the global market place. Fluctuations in fuel prices significantly affected the performance of flower industry in Kenya. The cost of production, cost of transport, and the cost of other commodities increased in response to fuel price increase.