Sunday Reading

New Delhi, 24 October 2008

Flower Industry

EXPORT BUSINESS NOT BLOOMING

By Radhakrishna Rao

Come winters, floriculturists are preparing themselves for a pretty harvest. As not long back, bewitchingly beautiful flowers in their diverse hues and scintillating patterns were considered a lucrative foreign exchange earner. But the track record of the floricultural industry would pale into insignificance in comparison to the spectacular achievements of the IT (Information Technology and Software) sector. Even so, no one expected that the fast growing floricultural export from India would take a hit during 2007-08 on account of a number of adverse factors including the appreciation in the value of the Rupee, fast rising airfreight cost and withdrawal of the air freight subsidy by the Government.

Statistics by state-owned APEDA (Agricultural Products and Processed Food Export Development Authority), reveal that the export of floricultural products from India during 2007-08 came down by over 40% in comparison to 2006-07. This down turn is due not only to the hardening of the rupee against the dollar, but the inability of the flower exporters to innovate, diversify and keep abreast of the dynamics of the global floricultural market.

However, the saving grace for the flower exporters is that the loss on the export front during 2007-08 has been made more than good by the growing demand, in fact a doubling of sale of the flowers in the domestic market. However, there is concern over the closure of a few export-oriented floricultural units in Bangalore and Pune, the two major flower growing centres in the country. At the same time, the Union government has approved over 150 export-oriented floricultural units. But only time will tell how many of these will actually take off and do well in the global floricultural market.

A lion’s share of the flowers, meant for export, is primarily airlifted between December and February. However, APEDA feels that expansion of the state-of-the-art floricultural production in green houses along with diversification and innovation could “enable large off-season production leading to larger surplus for export”. Clearly, there is a growing realization on the part of the floricultural exporters that they need to come out with new products if they want to stay competitive in the global market.

Currently, the States of Karnataka, Maharashtra and Andhra Pradesh account for much of the cut-flowers exported. But then as experts in the field point out, “We are facing stiff competition from African countries which have now started exporting to the Middle East as well.” Air freight to Europe, which happened to be the hub of global horticulture floriculture trade, from African destinations such as Ethiopia and Kenya, which are our major competitors, is US $ 1.60 a kg as against US $ 3 from India.

The total area under flower crops in the country is around 34,000-hectares. This includes 10,000-hectares under cut flowers, such as carnations, gerberas, gladioli and anthuriums, meant for export. All said and done, Indian floricultural products account for only around 0.18% of the global trade in flowers and serious efforts are being made to capture at least one per cent of the total market. However, there is a question mark whether India will be in a position to realize this goal.

Interestingly, the export target for 2010 has been set at Rs.10,000-million. But this too appears a difficult task to achieve. The ground reality is that at present India lags behind many third world countries including Israel, Kenya and Colombia in the export of floricultural products. In the given scenario and with a view to boosting the export of floricultural products, APEDA has submitted a proposal to the Union government for introducing a scheme for the procurement of planting materials for increasing productivity. Regrettably, re-plantation of certain flowers is not being carried out as importing the plantation material is far too expensive. As it is, difficulties in getting the right type of planting materials are a major challenge facing the floricultural export venture.

Experts in the flower industry drive home the point that even though many States have ideal weather and climatic conditions for the production of quality floricultural materials, little has been done on the export front. Given the problems besetting the industry, including lack of cooling facilities for green houses and the non-availability of good planting materials, the floricultural industry is bound to have difficult times in so far as boosting the volume of its products is concerned.

Moreover, many upcoming floricultural export units are forced to get the entire green house technology meant for cultivating high quality cut flowers aimed at the export from abroad at a very high cost, adding to the already huge initial capital outlay on the project.

Against this backdrop, a floriculturist who runs an enterprise in Dubai says, “My aim is to help the Indian farmers enhance the base life of flowers, while ensuring that customers too get better value for money”. He was of the firm opinion that the Indian exporters had not realized the potential of many lily and orchid varieties thriving in the lap of the ecologically diverse and biologically rich Western Ghats and Nilgiri hills.

In the meantime, in a significant development, many Indian floricultural firms, including a few from Bangalore are setting up high-tech floricultural enterprise in Ethioipia. In fact, now one notices a number of Indian-owned export-oriented floricultural units outside the capital city of Addis Abbaba. The Ethiopian Government now offers large tracts of land to floricultural companies on a very attractive lease terms, with a view to give a boost to floricultural farming.

Moreover, the Indian-owned floricultural units which have set up facilities vouch that they don’t face any bureaucratic hassles and corruption in their business. Not many are aware that Ethiopia boasts of a climate conducive for the growth of high quality cut flowers. Indian growers expect to reap the low freight cost advantage by operating from Ethiopia, till the Union government puts its house in order. ---INFA

(Copyright, India News and Feature Alliance)