The reasons are not far to seek. India's main strength has been its dynamic domestic market, and not its exports.The demand at home for flowers and flower products continues to pour in as the spate of marriages, social functions, parties by cine stars and celebrities and similar functions continue unabated.

As of now, there is no conspicuous impact worth the name on the flower markets - except minor corrections in prices - in cities and towns, where the main consumers are the well-to-do middle class population, whose number is on the rise. The industry looks forward with much hope to next year's Commonwealth Games that will attract athletes, officials, and visitors from abroad in thousands

Overall Mood

General Manager of Rise n' Shine Biotech Sunil Hambir summed up the mood saying, his company is expanding and exporting quality products. He explained that the quality- conscious buyers in Maharashtra are purchasing new colours and varieties of gerbera and other plants. "In fact our principals Terra Nigra are giving orders to expand their overseas markets and introducing new products in India as well."

The upbeat mood is reflected in the tissue culture industry in India. A senior official in K F Bioplants, which is credited with having India's leading tissue culture lab, said the company is doing well and expanding its production. It is introducing new crops to Indian growers, besides exporting to new overseas markets. "Surprisingly the Indian growers have responded positively to floriculture plantations this year which is very unlike in this recession worldwide, says Kishore Rajhans, Vice-President of KF Bioplants. We have lot of booking for Gerbera and other plants for green house plantation.

"We have overwhelming response mainly from Uttaranchal, Himachal Pradesh, Sikkim and Assam from North East. We also have fantastic response from Tamil Nadu and Karnataka," says Rajhans. (See Box) Bharat Bhojane, General Manger of Pune-based Germini Agro strikes a somewhat different chord. He admits that the meltdown has left its impact, although minimal, on the Indian industry, but is confident the sentiment in the domestic market will improve soon. "In my opinion, although the prices we are getting now in gerberas are really down, the prices of roses and carnations are not bad."

According to him, the markets are facing a cash liquidity problem, and he attributes this to "the mind block" of trade people who hold back payment.

One negative factor noticeable in recent months has been lack of demand from the tourism industry, which has been hit hard by the global recession. The hospitality industry is normally a large consumer of quality flowers and flower products. Overall figures show a setback in flower exports from India. However, much worse off are countries like Holland, for instance, or African countries, which are heavily dependent on exports to sustain their floriculture industry and trade.

Dutch market
In Holland, some 6821 companies make a living out of producing cut flowers and potted plants. More than 60 square kilometers of area in the country is under greenhouses. A statement by Dutch flower auction house FloraHolland is specific: The annual turnover growth in 2008 had dropped from projected 2.7 per cent to 0.25 per cent amid world economic crisis. It was no "fantastic year", according to the statement. All the same, Director Timo Huges sought to sound optimistic by saying that the effect has been "limited." The number of traded plants and flowers grew by 1.3 per cent to 12.4 billion, which showed, "even in economically difficult times, consumers in Europe seem to be brightening their homes with colourful flowers and plants."

In October, Industry body HBAG reported that exports to Britain, a major Dutch market, fell by almost a fifth in September. Globally, Dutch exports declined by two per cent in the first nine months of the year. It has been a "dark moment" for the European floriculture industry, commented Van Den Berg Flowers' General Manager Johan Remeeus.

The prices in the EU market dropped by 25 per cent, and compounding the problem was the high production in South American countries which were also sending flowers to the European market. High freight charges, which have gone up by 20-30 per cent, have made the situation still worse


Production cost
A serious problem afflicting Dutch floriculture this year is the increasing production cost. Fast rising energy prices are eroding budgets for transport and powering greenhouses. The economy of floriculture units there is so delicately balanced that they cannot afford to lower the already low profit margin. What is worse, once a unit closes down because of losses, it is very difficult to revive it again due to cost factors. The situation is unlike in India, where a unit which closes in one state because of high costs has the option to move over to another state - or even another area in the same state - where the conditions are more favourable, like availability of cheaper power and cheap labour.


Direct approach
One perceptible trend in flower growing countries abroad is the keenness to tap the importing markets direct, instead of routing their product via Holland. Since many floriculture companies in Europe are reducing their production areas, suppliers of planting material-bulbs, particularly - in those countries have, in the last six months, increased the frequency of their marketing tours to India and some other countries. Indian growers are being offered more incentives to buy new planting material. Prices quoted are also much lower. Says an industry insider in Bangalore, "Yes; the frequency of visits by foreign planting material suppliers and their telephonic calls have gone up manifold in the last few weeks. Since January 15, however, the pressure has come down." S. N. Chandak, Managing Director, Sheel Biotech Ltd elaborates, "There is no pressure or panic from carnation, roses and other planting material suppliers, because the crops which take longer time to grow have good market demand from Indian growers, who are targeting next year's Commonwealth Games and other domestic festivals. They are active purchasers." "Our ever green market is North East and Himalayan plains and it is growing. We are very confident about our quality and suppliers", he added.

Positive signal
The global downtrend has delivered a positive signal to Indian floriculture industry by underlying the industry's inherent strengths. The overall situation, in fact, offers new opportunities for the Indian floriculture sector. This is the right time for the government departments trying to promote floriculture and the Indian industry to seize the opportunity to prepare a long term plan to strengthen this sector and facilitate domestic suppliers to gain a stronger foothold in the developed markets. To attain this objective, the domestic industry should not only have access to technology and good quality planting material at reasonable prices but also proper marketing support. The need of the hour is good cooperation among all segments that would include big growers engaged in high tech production, small growers, input suppliers, cooperatives and government departments. Policy makers would do well to organise the domestic flower market and provide at least minimum infrastructure facilities like sheltered market yards to enable the growers to sell their produce, unspoiled by the harshness of summer sun or pouring rain.

Basic facilities to handle perishables like flowers are needed in all major cities and towns, along with adequate support from the state marketing departments. Needless to say, such facilities are now woefully lacking. The question is: Can we turn the present adversity into a blessing?