FloraCulture International has published an interesting, elaborate overview of the current state of the ornamental horticulture sector in Germany. What follows below is a slightly condensed version of that article.
Weather & Demand
2013 was a tough year for Germany, which experienced a long winter, a cold and wet spring and a very hot summer. Those weather conditions drastically affected the sales of plants, although to what exact extent is not yet known. That the weather induced a slump in consumption in Europe’s largest market is certain however.
Until June 2013 the temperatures were well below the five year annual average. In the short sales windows, there was a partial lack of regional goods ready for sale, though this bottleneck hardly affected prices. As of July, the summer heat led to price pressure and deteriorating prices, which have not yet significantly recovered. Demand for plants had not picked up by autumn.
However, there is an economic recovery in the Euro region. According to experts, the cyclical economic development has reached the trough. Economic performance in 2013 dropped by 0.3% in comparison with the previous year and a growth rate of 1% in the Euro region is forecasted for 2014 (DIW, 9/2013).
Particularly in Germany, there is a good consumption climate: German consumers are optimistic. Ifo’s cyclical economic forecast from June 2013 predicts GDP to rise by 0.6 % in 2013 and by 1.9 % in 2014. In August and September 2013, the consumption inclination of the population in Germany reached the highest values since December 2006 (GfK, 9/2013).
A Pot Plant Slump
The positive consumption climate has not spurred on demand for flowers and plants however. The weather-induced decline in demand shows especially in the field of potted plants, which also exerts a strong effect on foreign trade. According to Eurostat, the pot plant imports of the EU have fallen substantially in the first half of 2013.
This development is also reflected in the Dutch export statistics, which decreased by 3.7% in the first half of 2013 – those to main export market Germany even by 8.6%. The negative development had become even stronger by August 2013; for the first time ever, the export figures for flowers and plants dropped for the sixth month in succession.
A Lack of Alternative Markets
When German consumption “faltered” in the past years, there were alternative possibilities in the Southern European markets. These no longer exist due to the economic crisis and to the weak demand in Spain, Portugal and Greece and, to a limited extent, in France as well.
Increased supply to Scandinavia and England and the opening-up of markets in Eastern Europe do not make up for the decline either. All the more so because the Dutch supplies to Eastern European markets like Poland, the Czech Republic, Romania and Hungary also dropped in 2012 and had not recovered by the middle of 2013. Even plant exports to Russia showed no growth.
Cut Flower Sales More Stable
The intra-European trade in cut flowers proved to be far more stable and weather-resistant in the first half of 2013. The typical spring and summer flowers are registering good sales figures. Eurostat indicates a slight decline in the imports of cut flowers in comparison with the previous year. The imports from South America seem to be diminishing somewhat in favor of the African supply countries.
Dutch statistics indicate that the export of cut flowers declined by 4% until August 2013, compared with the previous year. This also roughly applies to the supplies to Germany. As Dutch exporters managed high sales increases in 2012, a level comparable to 2011 is being assumed for 2013. Especially in Germany, experts are seeing a trend towards a growing range of cut flowers available from regional outdoor production.
Similar to the developments in foreign trade, the demand in Germany is thus turning out to be stable for cut flowers and very weak for plants. Demand in the peak sales periods was good according to a survey of the German wholesale trade businesses. It seems that the purchases of cut flowers in the spring profited from the reserve with regard to buying plants. Apart from the low in demand in the hot spell in July and August, 2013 is being called a good year for cut flowers. Pot, bedding and balcony plant sales were dramatic.