Coronavirus impacts international flower trade
“Gesundheit startet hier!” That’s what the disinfection gel dispensers read at the IPM Essen last week. This week the Chinese hall is empty during the Fruit Logistica show in Berlin. The effects of the coronavirus outbreak in the industry though are broader. Since the Chinese holidays are extended and many flights are canceled, projects will be delayed. Due to the coronavirus, the trade at the markets is shut down as well: with no logistics and no trade on the markets, the market is silent. We spoke to several people in the industry to learn more about the situation and the impact on the international horti- and floriculture industry – particularly now, in the run-up to Valentine’s Day.
Export figures down
The health of the people is the priority and therefore, the Chinese government has taken actions to minimize the spread of the virus. Some of these also affect business. “Due to official orders to close public gatherings and to keep people’s transit/movements as low as possible, most of our clients have preferred to minimize their business until further notice. Most of their markets are frozen (zero movement)”, explains Ecuadorian flower grower Eduardo Chiriboga of Blawesomes.
As a result, export figures to this country are down, also in flowers. “China’s purchases for Valentine’s Day as well as for Chinese New Year, which was held last week, are down in significant numbers. Because both events were around the same time, prior to the outbreak everybody was expecting great sales. As a matter of fact, gypsophila growers had sold very interesting figures. In the end, however, we ended up with great cancellations in roses as well as in gypsophila. Our objective is to redirect that product to our other markets”, Chiriboga says.
Also, Ecuadorian grower Belen Garcia of Florsani had high hopes for Valentine’s Day, but it resulted in a loss. “We had many prebookings this Valentine’s Day destined for China. All those orders were canceled. As 80% of the flowers we sent to China are tinted, these orders involve a lot of extra labor as well. This is a big hit for us, we had to make a reorganization of the orders and of course, some flowers that were ready to be sent were lost.”
Colombian flower grower Pablo Bazzani of Plazoleta says that at the moment their sales have decreased by 40% due to preventive quarantine measurements in flower and plant markets since they are nearby meat and animal markets.
It becomes clear that all growers exporting to China are affected. Ravi Patel of Subati Group, a Kenyan rose farm, also told us that all Valentine’s Day orders have been canceled until further notice.
But the Chinese are the ones who are affected the most. “It is primarily a problem for our clients”, says Paul Hoogenboom, Director of Holex Flower, a Dutch flower exporter with offices in China. “A bit of our turnover will be lost, but for them, the situation is worse. They cannot sell anything as the logistics are being frozen.”
The growers understand the situation that China is going through now and most of them are in constant contact with their clients. “You can feel the clients’ concerns. First shops were closed and now that they are open again, many flights (more than 25,000 flights, Bloomberg reported on Monday) are canceled. Therefore, orders are delayed or don’t arrive at all, because they are canceled by cargo agencies”, Garcia says.
For Bazzani, his customers are mostly located in Beijing, Shanghai, and Guangzhou. “Even though the worst situation is in the Hubei area, all of China is affected by the precautionary measures taken by the government.”
Challenge – how to direct production?
How to continue? Chiriboga: “The lost sales are lost, there is not much you can do about that. However, the challenge now is where to redirect production. We have been able to redirect most of our production, as well as other growers. This created an oversupply, something that’s affecting everybody.”
Uncertainty – when will China start buying again?
Even though everyone is hoping a solution will be found soon, nobody really knows when the trade will get back to normal. “No one knows when China will start buying again. Business-wise, I think that’s the worst of what is happening”, Chiriboga says.
The horticultural industry is an industry of exhibitions, and many suppliers travel all over. At the IPM there were hardly any Chinese visitors – not only because of the coronavirus and travel restrictions but also due to the Chinese New Year. This week the Fruit Logistica takes place and the organization wants to assure everybody they are doing everything within their reach to avoid spreading the virus.
Right: filling in a health form is required to enter the Fruit Logistica.
The next horticultural show in Asia is the Hortex Vietnam, which will take place from February 26 to 28, 2020. Organizer Kuno Jacobs explains how Vietnam has stepped up efforts to control the spread of the virus. “Due to the new efforts from the government to control the virus, Vietnam does not issue (business) visas anymore to Chinese citizens, therefore we do not expect to have any Chinese exhibitors and/or visitors to be present at HortEx Vietnam.” Other measures will be taken, including hand disinfectors and a higher frequency of disinfection of the exhibition hall.
The situation might be different for the Hortiflorexpo IPM Beijing. This show is the biggest horticultural show in China and is to take place in April. Due to the virus outbreak, several companies are doubting whether they will be able to and want to go. It is currently unsure how the show will continue this year.
Fortunately, there’s also some good news to share: “Our production continues”, Loek van Adrichem of Berg Roses, a Dutch rose grower with a greenhouse in Kunming, informed us. “Workers are present and the trade continues. Of course, we do not know what tomorrow will bring, but so far, no bad news from our side.”