ADDIS ABABA, Ethiopia (Reuters) – Income from Ethiopia's flower exports will more than double to $150 million this year, but future expansion may be hit by the global financial crisis, the head of a private industry body [that is affiliated with the ruling party] said on Monday.

"People's priority in a global crisis is not to buy flowers. Their priority is to provide food," Tsegaye Abebe, chairman of the Ethiopian Horticulture Association, told Reuters.

Abebe said Ethiopia's fast-expanding sector, which hopes to rival neighbouring Kenya's larger flower industry, was on track to produce between 800 million and 900 million stems for export this year worth $150 million.

That compares to 365 million stems worth $64 million in 2007. But plans to double exports again in 2009 would be affected by the crisis, which was forcing flower prices down in Ethiopia's main European export markets, Abebe said.

Some of Ethiopia's 106 producers, including local and foreign investors, had already begun diversifying into vegetables and fruits, he said. But Ethiopian flowers remained popular abroad because they were organic, Abebe said.

"We do not use pesticide. Our farmers are using integrated pest-control management without recourse to chemicals," he said.

Offering tax breaks to attract investment, Ethiopia hopes flower exports will overtake coffee and be worth $1 billion in five years time. Flowers are now grown around the country, with farms employing about 60,000 people, mainly women.

Kenya earned about $1 billion from horticulture in 2007. Tanzania, Uganda and Rwanda are also developing flower industries.

(Reporting by Tsegaye Tadesse; editing by James Jukwey)

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