IN the cruel winter of global economic meltdown, the flower trade in many a country appears to be a wilting victim. There are reports of downtrend in Africa. Exports from the Netherlands, the world's biggest flower market, have run into problems as well. India, an emerging flower exporter to world markets, is no exception. Exports out of India have come drastically down over the performance a year ago. A worried government shared the grim prospect with Indian Parliament the other day. On December 15, Minister of State for Commerce Jairam Ramesh said flower exports have plunged to Rs.338.01 crore from Rs.694.84 crore. The slump is a huge half. In the main, India exports flowers to the Netherlands, West Asia and the Far East. Government hasn't made any detailed study of the big drop in exports, just yet. However, a recent article in Floriculture Today magazine threw up some revealing factors for the decline in exports. Among the reasons is a growing domestic market. There is a markedly higher consumption within the country by India's emerging well-to-do middle class population. The industry also believes that developments in real estate may have impacted on the growth of commercial floriculture. In and around Bangalore and Pune, several farms have closed down. The magazine sounded a note of warning in October. "The time to act is now. Unless we step up our efforts with a sense of urgency, one should not be surprised if India, with its share in world trade of flowers much less than 1 per cent, soon becomes a regular importer of flowers." Things haven't gone better since then. In November came a big crisis after the Mumbai terror attacks. It has hit the tourism industry hard at its peak X'mas/New Year season. Floriculture was a casualty waiting to happen. "First there was the global meltdown, which sent the hospitality industry reeling. And then the Mumbai tragedy. A double whammy," remarked a senior official at the Taj Hotel. The industry called off New Year celebrations in honour of martyrs. Will the upcoming wedding season [from 15 Jan] help lift the battered sentiments? Says Mohd Nasser, Director of Zopar Floritech in Bangalore, "Marriage is a happy season. Indian floriculture should start looking up. Flower growers are waiting to cheer!"

Lacklustre response
Across international markets, the signs of a gloom in trade were visible for all to see for some time past. "By mid-October, as we arrived in Holland for the Horti Fair 2008, we were struck by a new phenomenon," reported a Media Today team of MB Naqvi and S Jafar. To the Fair regulars, participation at the world's largest floriculture event this year appeared lacklustre and somewhat low compared to market expectations. Country pavilions were fewer than before, they found. So were trade visitors. Even the covered area at the fair had dropped 15 to 25 per cent for the various pavilions. The showing was below par and caused eyebrows to be raised. Perhaps flower growing countries are now focusing on tapping the importing markets direct -- not wanting to route their produce via Holland. In recent times, growers from those regions have been participating in trade events elsewhere like Japan, Germany, UAE and the like. At another level, the planting material suppliers also appear to be gravitating direct to producing areas -- skipping Hortifair, that had been the chief destination for trade dealings and for technology exchanges. Now the suppliers of materials and technology are going to production centres like Kenya, Ethiopia, Colombia, China and India. The advantage to the suppliers is obvious: they can meet growers, both present and potential, in these emerging production centres.

Flower vs Food
In many countries, floriculture appears to be giving in to other priorities. "People's priority in a global crisis is not to buy flowers. Their priority is to provide food," says Tsegaye Abebe, Chairman of Ethiopian Horticulture Association. Flower exports have been a big money earner for Ethiopia, but efforts at expansion seem doomed. Abebe says income from floral exports will more than double to $150 million this year. That doesn't tell the full story, though. He fears "future expansion may be hit." Africa, being closer to Europe, has posed problems for India's emerging exports.

Ethiopia itself has nearly 106 major flower producers, local and foreign, to reckon with. But in recent times some of those producers have chalked out other plans. They have begun to diversify into vegetables and fruits, according to reports. Ethiopia has been offering tax breaks to lure investments back into floriculture. At other levels, the problem with exports has implications beyond the floriculture trade. The Ethiopian airline is feeling the impact as well. Flowers from the country have been a major cargo to Europe


Battered confidence
In the world's leading Dutch market, flower exports to Britain fell by almost a fifth in September, says a report from Amsterdam. The exports to Britain have dropped by 84 million euros since the beginning of the year. Battered consumer confidence has curbed sale of luxury products like flowers and plants in Netherlands' three main export client markets: Britain, Germany and France.

"First there was the global meltdown, which sent the hospitality industry reeling. And then the Mumbai tragedy. A double whammy," remarked a senior official at the Taj Hotel

"When people have less money to spend, they tend to buy bread instead of flowers," says Mike Lansbergen, sales manager with a major Dutch producer Barberton Daisies. Dutch growers and exporters are obviously worried. "Nobody in the sector knows what will happen. People are spending less

'When people have less money to spend, they tend to buy bread instead of flowers'

money on non-essentials," said Richard Caldwell, product developer with Canada's Sierra distributor, at the recent flower fair in Amsterdam. The problem looms large. "Our clients are delaying their decisions on new purchases and investments. It's not easy," complained Bart Sneek, a Dutch flower grower who exports to Colombia, Latin America and Japan. "Previously, one always dealt with one or two countries whenever the consumer confidence was down. Now it's the entire world."

High costs, low sales
Lansbergen, whose company sells a million Barnerton Daisies a week, is worried the more because the global economic meltdown now is the second shock in a row. The industry is still battling to recover as fast rising energy prices eat into budgets for transport and powering greenhouses. Over the past year, production costs increased by 20 per cent and sales fell by 20 per cent. Result: a 40 per cent hole in revenues! Flowers, bulbs and trees contribute 35 per cent to the Netherland's trade surplus, according to data from the economic ministry. Last year, exports of flowers and related items from the Netherlands amounted to 5.5 billion euros. Some 6,821 Dutch companies make a living out of producing cut flowers and potted plants. Greenhouses cover an area of more than 60 square kilometers. A billion tulip bulbs are exported every year.

Big drop in growth
The Netherlands is the largest exporter and importer of cut flowers and potted plants. The country has recorded sales valued at over 4 billion euros in 2007, selling 43.2 million flowers every day. But the picture as it emerges could be different. Take Flora Holland auction company. Having recorded a turnover growth of 4.4 per cent last year, the company expects a mere 1 per cent growth for 2009.

"The credit crisis will have a bigger and bigger impact on the real economy," said Flora Holland spokeswoman, Adrienne Lansbergen. "Our suppliers and customers are being prudent in their investments. We expect the market to recover by 2010 at the earliest." What about the New Year 2009? That's the more immediate concern.