The global economy is increasingly at a risk of sliding into recession according to recent surveys. Consumers are faced with generation-high inflation rein in spending while central banks are tightening policy aggressively. Spiralling costs of farm inputs like fertiliser in the back drop of global disruptions have also seen flower exporters grapple with higher input costs.
This year’s Valentine’s Day, florists and retailers were in the middle of a rush, but all over the world, the holiday was different compared to last year, which was filled with optimism. This year, the weather seemed to have been a major challenge in Latin America and Africa, delaying production. Pre-books seemed to be in later than usual, and for some, they were even lower. Prices at the Dutch auction were lower than expected. Production and transportation costs were high and the florist and, eventually, the end consumer felt it.
As a result of the energy crisis, the supply of Dutch flowers and plants was less than in previous years. While this caused high purchase prices, it also caused concern: how much more was the consumer willing to pay? Another consequence was that trade is more actively looking for a cheaper product from Africa or South America, all in all a worrisome situation for the position of Dutch ornamental plant cultivation in the global playing field.
The red rose- the ‘symbol’ of Valentine’s Day, supply from the Netherlands was a third smaller than last year, Michel van Schie, spokesman for Royal FloraHolland, told a Dutch broadcast. “This gap is partly filled by roses that are flown in.” In addition, there was a run on everything red, and flowers were selling well across the entire range.
In the run-up to Valentine’s Day, the demand is good, but the Dutch supply is scarce. At the auction in Aaslmeer, around 180 million roses were traded in the run-up to Valentine’s Day. The price per stem was on average, according to auctioneer Menno Nan as he spoke to a Dutch broadcast. An excellent price, but not what the Dutch grower wanted for them. This was also because consumers were not willing to pay the price that was actually required.
Over 70 per cent of Kenyan flowers are sold in the European Union through the Netherlands and United Kingdom, says KFC. During Valentine’s season flower orders start going up from mid-January to around the 8th of February. “Today, the industry is struggling. The margins are shrinking by the day. Growers are struggling to supply the market and maintain Kenya’s position as a key producer of cut-flowers”, said Clement Tulezi in a twitter post . The run-up to Valentine’s Day was a challenge for many Kenyan growers.
On top of the high costs, production was down at many farms due to the weather. Nights are cold and very dry, and this is delaying production. This year, already one flight for Valentine’s Day was cancelled due to short supply”, said Sachin Appachu of Bliss Flora.
The prices at the auction were not as expected, about 15% lower, but fortunately, they increased days to the Valentines Day. “However, last year was better in terms of volume of sales and revenue.” “This season the prices of inputs have remained high. The global recession on major markets and pressure on fuel and gas has seen people reduce spending on ornamentals like flowers; they have to make a choice between buying food or flowers, ”he added. The Kenya Flower Council (KFC) had warned that freight costs would remain high well during Valentine’s Season, offering no relief to Kenyan flower exporters who were confronting reduced demand from key markets and high input costs as inflation rages across the world.
Mr. Tulezi said Kenya suffers a shortage of cargo capacity of about 2,000 tonnes. “Nothing has improved (in terms of cargo capacity),” Mr Tulezi said. “The industry is really struggling.” “We see shipping by sea as an alternative,” he said. “We are pushing out about 15 containers every week.”
“Per-kilogramme freight costs are averaging at $2.9 (Sh301),” Tulezi said whereas Straight roses fetch between $1.9 (Sh235.6) to $2 (Sh248) in European supermarkets. He reiterated an earlier request to the State to allow licensing direct access to international markets from Nairobi by foreign airlines in a bid to lower the costs. Again, the flower sector is also seeking the fast-tracking of Value Added Tax (VAT) refunds by the government of between Sh12 and Sh13 billion. Adding that refunds have compounded the liquidity challenges facing flower exporters. “Some growers are owed upto Sh1.2 billion,” he said.
United States While certain flowers, such as roses, are available all year, others, such as tulips, daffodils, and poinsettias, are very seasonal.
Valentine’s Day is still the second largest “floral holiday” for the U.S, Prince & Prince market survey estimates and forecasted $3.6 billion dollars in U.S. consumer floral purchasing for Valentine’s Day 2023. Most shipments come from Colombia and Ecuador, most going to Miami and New York. The most popular flowers remain roses, mixed bouquets, and chrysanthemums. This year, American transported 50% more flowers out of Europe than in 2022, or more than 417 tonnes, for the Valentine’s Day peak. The airline uses its trucking network and widebody planes to deliver Dutch tulips and roses to the United States and abroad through LHR and CDG.
And as everything is getting more expensive, also the prices for flowers for the end consumer were expected to be higher. “Prices have gone up 15-20% for this holiday,” Michael Cherry, owner of Hayes Florist in Florida, told the media. “Mainly because of fuel charges and supplies, prices went up 25-50% post-Covid, and that was mainly the supply chain in China. All of the supply raised for stands, for flower arrangements, and funerals.” He also added that freight charges for flowers imported from South America had gone up, forcing florists to increase their prices.
Most of the flowers sold in the U.S. are imported, and many come from Colombia. Nearly 6 billion stems per year are being produced, of which 700 million are shipped to the U.S. for Valentine’s Day, according to Asocolflores. But Colombia sends flowers to many more countries, more than 100 countries all over the world, and 80% of the airfreight exports of this country are even flowers.
The weather has been the main challenge, delaying the production of roses and decreasing the production of other crops like hydrangeas. “The production was about 24% lower due to the dry weather, Catalina Arango of Flores Del Este told us. But demand was high.
Also, in Ecuador, the weather has been one of the major challenges. “First, it was ahead by the end of December, and all the crops stopped at bay, then beginning of the month of January was late by which the late peak came out; all this experienced most flower farms located in Pichincha and south towards Cotopaxi”, Naranjo Roses said. In addition, growers faced the aftermath of the volcano’s ash fall. According to Expoflores’ data, there is an increase of 5.54% in total export volume. Also at Naranjo Group , their exports increased. “We exported around 5 million stems, growing 20% compared to last year’s Valentine’s Day. And there were not so many problems for cargo for this Valentine’s Day season, Carlos Gomez, Director of the board of Directors at Naranjo, adds. “It could be handled with better prices and with great efficiency.” Also, Rosaprima, who had to deal with Ecuador’s unpredictable weather, said that they were pleased with this year’s Valentine’s Day.
Even though, the big rush was expected at florists, a Saskatchewan florist told the media that more lovers shopped early, steadily demanding flowers despite inflation. Quinn Brown, co-owner of Quinn and Kim’s Flowers, said they saw a lot more advance orders and offered more options for shoppers on a budget, but that it was hard not to notice the impact of inflation in all aspects of the business.
India’s floriculture industry, which grows flowers including roses and tulips for both domestic and international markets, deems the December to March window as its peak export period. The Valentine’s Day rush results in a significant demand for cut roses which are exported around the globe. Talegaon, near Pune, is an important growth centre for flowers with many in the region exporting flowers.
Praveen Sharma, president of Indian Society of Floriculture Professionals, said Indian growers and exporters were at an advantage this season in view of the ongoing Ukraine crisis. “Most European growers have taken a break given the uncertainties in the markets, and the fuel crisis has seen many growers take a break,” Sharma said. Due to the fuel crisis, the cost of growing roses has increased and the economic disturbance has led to uncertainties in the markets. Rose growers in Europe have to spend extra to maintain ambient temperature during the winter months.
Valentine’s Day in Japan used to be celebrated with chocolate, but nowadays, due to the efforts of the Flowering Japan Council, it is also a flower holiday. Nobu Kaishita of Chrysal Japan Limited explains how it changed over the years, and how ‘Flowers Valentine’ is now becoming a culture in Japan as well.
Since 2010, the general incorporated association, Flowering Japan Council, has been playing a central role in developing the ‘Flower Valentine’ movement, in which men present flowers to women. Nowadays, there is no distinction between men and women, and ‘Flower Valentine’ has expanded as a day to give flowers to friends and even to yourself.
According to a survey, the percentage of customers purchasing flowers on Valentine’s Day ranged from 13% at Aoyama, UNIQLO, to 25% at Hibiya, and 5% at Aeon.
Germany, UK and France
In January, flowers, with a contraction of 3% to 331 million euros, performed worse than plants, with a growth of 1% to 194 million euros. “Germany, the United Kingdom and France in particular recorded a contraction for the flowers,” reports Wesley van den Berg, manager of Floridata. “Trade to most export countries outside our top 3, on the other hand, experienced growth,” said director Matthijs Mesken of the VGB.