These days, the flower industry is becoming highly dynamic and vastly an international business undertaking. Substantial development has been achieved during the past few decades. Flower Trade is dominated by Europe, Middle East and North-America, the world’s largest consumer markets, while the producing countries are situated close to the equator. For the past ten years, the leading flower exporting countries have been the Netherlands, Colombia, Kenya, Ecuador and Israel. Since a few years, Ethiopia has become the world’s five top exporters while Israel’s position has weakened.
The astonishing growth of flower production in these countries, however, was not gradual, and certainly not automatic. Producers were hit hard by the Global Energy crisis, Covid-19 Pandemic, irregularity of Flora Holland selling Price there is a general feeling that the industry faces a period of dramatic changes as it responds to the challenges posed by economic conditions.
Market demand is stagnating, while the supply of flowers is abundant. In the medium and long term, a moderate growth of only 2 to 4 percent annually is expected in Western Europe’s cut flower markets. In addition, consumer demands, and subsequently trade requirements, are becoming more demanding and increasingly differentiated. The demand for sustainable produced and distributed products is rising.
As a result, margins are under pressure and playing rules are changing significantly in the flower industry. The industry is evolving towards lean and transparent supply chains. Direct trade channels, bypassing the auction system, are growing. An acceleration of technology and knowledge development is witnessed, not only in cultivation, but particularly in the way flowers are traded.
Transactions are increasingly handled by means of computer systems. More than 60 percent of the roses traded at the Flora Holland auction are sold through the remote buying system ‘KOA’. European wholesalers offer products in their own online web shop, where customers (wholesalers and retailers) can buy directly from stocks. Trade becomes virtual making accurate exchange of information critical.
Another important trend that can be noticed is the increasing relevance of social and environmental standards in the European flower trade. New patterns of consumption, media pressure, and campaigns by non-governmental organizations (NGOs) have generated consumer interest in the conditions under which flowers are produced in the developing countries.
Nowadays, the market is characterized by the existence of a multitude of standards in the form of certification schemes, codes of practice and a handful of consumer labels. One of the reasons for this large number of co-existing certificates is the fact that retailers tend to adopt those standards which best meet their needs. There is even a strong trend among large retailers to set up their own private standards. So, although fragmented, the importance of standards in the European flower is increasing.
It is expected that high-tech developments and ever stricter requirements for suppliers continue in the future and will increasingly determine who is allowed to participate in these chains. Further growth of flower cultivation in East Africa will depend for a large part on the ability to adapt to these changing conditions.
The five leading global flower exporters in terms of export value of this moment are the Netherlands, Colombia, Ecuador, Kenya, and Ethiopia. These countries are competing with each other on the same Markets in Europe, in Russia (Pre-War), and Middle East North-America, and competition is getting tenser every year. This increased rivalry is partly due to stagnating demand, but also as a result of the growing number of large-flowered roses grown in Africa and the generally improving quality of the African products.
Ecuador, and to a lesser extent Colombia, are exporting more flowers to Europe and Russia (in prewar time than a few years ago. Eastern Europe has already become an important market for Ecuador. Colombia is also increasingly targeting niche markets, which traditionally are supplied by Dutch and African flowers. Kenya and Ethiopia have good enough to supply the Russian market in prewar time aswell.
Competition on the North-American market is also increasing. Ecuador is looking to increase its market share in the coming years. Kenya is still struggling to develop its exports to the USA, despite the absence of import duties. US airlines and the Kenyan government are discussing possibilities of opening up direct flights between the two countries.
A new comer among the big boys of global floriculture is Ethiopia. Ethiopian flower industry has grown tremendously since 2004. In 2004, production area was an estimated 840 hectares with about 46 thousand tons of flowers being exported. In 2022/23, the sector had already grown to 1,600 hectares. Now, there are about 1,600 hectares of flowers (greenhouse and outdoors) with 291,000 tons of flowers exported last year. In 2011/12 the total foreign currency earing of flower sector was 196 million USD and reach to 627 Million USD in 2022/23. Ethiopia grows mainly roses, carnations, statice, alstroemeria, lilium and a variety of summer flowers.
The flower sector is now becoming the second top foreign currency earnings next to Coffee. The growth of floriculture industry however, has not always come easily. For the last few years, the sector was confronted lack of adequate land for expansions and for new developments. Lack of access to land eventually limited the opportunity of existing and new investor to demonstrate their potentials to enhance production which could be supplied to Global Market, and thus effort has to be made to support the floriculture industry for the time to come.
NB: The writer is a horticulture export coordinator at the Ministry of Agriculture
BY MEKONNEN SOLOMON
THE ETHIOPIAN HERALD TUESDAY 31 OCTOBER 2023
