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- April 18, 2020 at 1:47 pm #21165WillieeArmelliniKeymaster
COVID-19 crisis: Supporting and promoting the value and strength
of the hard-hit global floriculture industry and supply-chain
The international floriculture industry has for the last three decades been an outstanding success-story of a highly integrated and interconnected global supply-chain making an immense positive contribution to both developed and developing economies around the world. In particular it has significantly enhanced the livelihoods of thousands of people in Africa (Kenya and Ethiopia) and South America (Colombia and Ecuador) who directly or indirectly derive an income and valuable socio-economic prospects from the outstanding performance of these countries on the world market. Increased globalisation and interdependence have also fostered greater efficiency in the supply-chain and in the sustainable use of resources, and have positively stimulated coordinated efforts across the floriculture industry to ensure it operates their businesses in a socially and environmentally responsible manner in response to the demand for sustainably produced and traded floriculture products.
The modern floriculture industry is a global web of businesses comprising breeders, propagators, growers, exporters, shippers, importers, wholesalers, distributors, specialised and non-specialised retailers that operate in an inter-dependent manner to bring all-year round colourful and natural products to destination markets for the ultimate delight and well-being of billions of consumers around the world. It is testimony to the efficiency of this entire supply chain that it can deliver highly perishable flowers within 48 hours of them being picked into the home of customers anywhere in the world.
But it is precisely because of this interdependence that the worldwide floriculture industry has been one to feel the greatest impact with the escalation of the COVID-19 crisis since mid-March. An unprecedented and massive ‘domino effect’ is now in progress throughout the floriculture industry across the globe.
The downturn was initiated by the general closure of all non-essential shops in key destination markets and the restrictions placed on consumers in making their customary purchases in those countries where the virus struck. The immediate result was a sudden drop in demand, spectacularly illustrated by the sudden sales and price collapse at the Dutch auctions mid-March. Production and supplying capacity being at its peak at this period of the year, the impact has been particularly brutal on the flower industry around the world. Market prospects for Spring flower-related traditional celebrations such as the upcoming Mother’s days across Europe and in the USA are still more than uncertain. Production costs in producing countries cannot be covered by limited sales, and the planning of the future production cycles is on hold.
The specific challenges of managing the pandemic are now reaching full effect in the major producing areas in Africa and South America. It adds to the current complexity of the overall situation for the flower industry in these countries to continue to supply key markets and respond to the first signs of demand recovery in weeks. Globally, almost all international scheduled airlines have currently ceased to operate and the increased worldwide demand for airfreight has resulted in rates escalating to levels that the industry cannot sustain. Under these circumstances the traditional airbridges to key destination markets have limited availability and at a price level that is largely unsustainable for flower-suppliers from the Southern hemisphere. For example, freight availability for flowers out of Kenya is currently less than 25% of what would normally be available at this time of the year. The drop in European demand has forced air cargo operators to look elsewhere and coupled with the reduction of freight availability from scheduled airlines, and an increased worldwide demand for COVID-19 health and food related supplies, means that more lucrative opportunities became readily available.
The floriculture industry is a major employer in the many key countries around the world involved in the production, trade and distribution of floricultural products. Hard decisions are having to be made everywhere. In the major production areas in Africa and South America, growers are having to balance the cost of securing the livelihoods of their employees while maintaining the productive capacity of plants in the ground for the future, all from significantly reduced income. Elsewhere in Europe, Northern America and beyond, businesses across the supply-chain (growers, wholesale, import and export, distribution channels and retail shops) are faced with similar challenges from the downturn in sales with many at risk of financial collapse.
UNION FLEURS – International Flower Trade Association, on behalf of its international membership and businesses active in the floriculture trade and value-chain, calls on all Governments, the European Union, international institutions, other associations of the floriculture sector, related economic operators and its global network of long-term partners of the international floriculture industry, to support and strongly promote a number of essential elements that are key to ensure the viability and survival of the international floriculture industry, and all related jobs and businesses now at stake across the world, and allow it to re-start and recover after the current COVID-19 crisis:
KEEP TRADE GOING:
- Essential conditions of international, regional and domestic trade must continue to be guaranteed: functioning of airports, airline crew, ports, trade routes, customs, phytosanitary inspections, availability and space on cargo freight at sustainable prices (air, sea, land)
- Procedures in the export, import, customs and phytosanitary control areas should be made as fast and lean as possible to ensure a swift and efficient clearance and preserve as much as possible the quality of these highly perishable products.
- Activate trade facilitation tools e.g. digital processes and documents as much as possible
MITIGATE THE DOMINO EFFECTS ACROSS THE SUPPLY-CHAIN AS MUCH AS POSSIBLE:
- Support floriculture companies involved in the production, trade and distribution wherever possible in addressing cash flow and liquidity issues
- Additional transport and handling costs should be borne across the supply chain including customers
- Government support should be enabled to help businesses throughout the supply chain, including wholesale, distribution, florists and garden centres, to continue or resume business when it is deemed safe to do so.
- Demand and sales channels in destination markets should be sustained wherever still possible during this crisis, be it in supermarkets or online deliveries at the moment.
- Keep exposing consumers to floriculture products as much as possible and in whatever possible channels, so they don’t forget about their positive contribution to quality of life and a healthy lifestyle and buy again via their usual channels when the crisis will be over.
- Production in non-European producing areas should be sustained through facilitation of affordable freight rates and associated logistics arrangements.
The entrepreneurial and innovative capabilities of all industry players across the floriculture value-chain are being tested as we move through this crisis and will continue to be challenged going forward. But while this industry is currently in an extremely vulnerable position throughout the world, we are confident that the interdependence and partnership that define our industry will be our strength in overcoming the immense challenges ahead.
DOWNLOAD STATEMENT IN PDF For further information, please contact:
Sylvie Mamias, Union Fleurs Secretary General
Note to the editors:
Union Fleurs – International Flower Trade Association is the international umbrella organisation for national associations and companies active in the floricultural trade. The general mission of Union Fleurs is to represent, promote and defend the worldwide interests of traders and wholesalers in cut flowers, cut foliage and pot plants.
Union Fleurs was founded in 1959 in Brussels and has nowadays members in 20 countries worldwide (in Europe, Africa, Middle-East, South and North America, and Asia). Within its membership, Union Fleurs gathers over 3.000 companies worldwide, of which more than 1,500 floricultural traders and wholesalers in the EU. Members account for more than 80% of the total value of the worldwide trade of cut flowers and pot plants.
More information on Union Fleurs is available at: http://www.unionfleurs.org
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