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Consolidation characterizes Costa Rica’s flower sector

The number of flower growers and exporters in Costa Rica has fallen by 70% over the last 5 years. Exports have simultaneously fallen only modestly however, suggesting that (international) competition is fueling a strong process of consolidation in the sector.

Flower growers and exporters have decreased “by almost 71% from 2009”, Costa Rican periodical La Prensa Libre reports. The country’s Chamber of Plants, Flowers and Foliage Exporters reduced its members from 93 to 27 over the five-year time period, signaling the business sector is struggling significantly.

The Costa Rican flower export was worth more than 36 million U.S. Dollars in 2012, but that figure has dropped to 34 million last year. Ornamental plant exports similarly decreased, from 83 million U.S. Dollars in 2012 to 77 million last year. This reduction has to do with two factors, explains Mónica Segnini, President of the Chamber of Exporters of Costa Rica.

“The first one is the exchange rate and the currency appreciation of the Colón for three years. We have to remember that flowers and their production have increased in other countries like Ecuador, Colombia, Guatemala, Honduras and El Salvador, which causes more competitiveness. The second factor is that production costs in the country are much higher than in the countries we compete with to export to Europe and United States”.

To date, 27 flower growers remain in the country. Although they have seen many of their fellow exporters go under, many are not too worried and feel that the market has recovered by now – and that it could improve even more, provided the appropriate measures were taken.

Source: HortiBiz

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