Did you buy roses for Valentine’s Day this year? And, we are certain they were not from India. Reason: Covid and high freight rates. Flower growers/exporters from Pune and Bengaluru have had the worst year. But as TIRTHANKAR GHOSH found out, they had a reason to smile, thanks to the record number of marriages in the country
PRAVASISAMWAD.COM
It is that time of the year when love shines. But India’s flower growers/exporters will hardly feel the warmth of love this Valentine’s Day 2022. Cupid will once again bring tears – like last year – to flower growers/exporters. Many had hoped that exports would rise but that did not happen.
As Venkatarao Kopuru, Director, Iris Biotech Pvt Ltd – a grower of Roses, Carnations, Gerbera, Lilliums put it simply, “Our problems are continuing and all the costs starting from greenhouse cost, plants cost, input costs, air freight costs are increasing continuously”.
Kopuru is not alone. The flower farms at Bengaluru, Pune and a few other places in the south of India may be alive with a variety of colours and fragrances but that has hardly brought smiles to the growers and exporters. Reason: Covid-19 and its aftermath. The flower capital of India, Bengaluru, sees more than 10 million stems of red roses being exported every year. This year, however, the story is no different than last year, that incidentally was also a challenging one.
The pandemic has led to closure of large farms, loss of round the year export market for fresh cut flowers, significant inflation in raw material and services related to horticulture. “The flower exporter is fighting hard for survival in a very competitive industry and looking desperately to the government for temporary help which unfortunately is not there,” said Hari Subramanian, CEO, Orion Flora Private Ltd. “The pandemic,” he emphasized, “has created huge challenges for the flower exporters, especially losing their round the year market due to high freight and increased C&F pricing.”
The biggest hurdle for flower exporters has been the huge rise in air freight. Over the last year air freight has risen making rose exports from India uncompetitive globally. Kopuru said, “We have many export orders but we are unable to execute all of them due to very high freight costs and the risks too, are very high due to that. The orders we okayed have been fulfilled.”
He went on to say that “air freight costs are exorbitantly high — and it is 350 to 400 per cent higher — when compared to pre-Covid levels. Added to that is that there are not many flights. Also, during the peak export season, a few carriers cancelled flights after confirming the schedule and space. As a result, we are left with no choice but delay shipments by a day or so”. And, that is a problem for the most delicate of perishables — flowers!
Kopuru said that flower exports were taking a part of the increased freight costs to customers who were willing and “the rest we are absorbing. As a result our margins have gone down. We need to do this to sustain the continuity of the relationship with our customers. In some markets we have stopped exports totally because the customers are not willing to share the increased freight costs”, he said.
“The main challenge this year was the high freight cost and lower availability of freight for e,g. BA has reduced capacity from 17 flights a week to LHR to 4 flights a week during the pandemic. The highest freight rate was to Amsterdam at Rs 418/kg ($5.50 per kg) as compared to Rs 150/kg ($2 per kg) pre-pandemic.”
— Hari Subramanian, CEO Orion
Pune-based Orion Flora’s major markets are in the UK. It works with small, marginal and medium size growers giving them the opportunity to create a sustainable long term export market for cut flowers throughout the season. Orion’s marketing partner Indifresh Ltd is the largest importer of Indian floriculture products into the UK. Together with Indifresh it has increased the export quality of Indian roses. Orion’s CEO, Hari Subramanian, also pointed out the hurdles this year highlighting the fact that the challenges were for multiple reasons. “The export of fresh cut flowers from India has gone down considerably round the year due to flight restrictions and the resulting high freight rates from India to most destinations,” he said.
Subramanian went on to say, “The main challenge this year was the high freight cost and lower availability of freight for e,g. BA has reduced capacity from 17 flights a week to LHR to 4 flights a week during the pandemic. The highest freight rate was to Amsterdam at Rs 418/kg ($5.50 per kg) as compared to Rs 150/kg ($2 per kg) pre-pandemic.” The resulting “high C&F pricing for red roses was a significant factor in lower export orders this year”, he pointed out.
He informed that approximately 3 million stems of red roses were exported from Pune during Valentine this year. “All the exports of roses from Talegaon and other parts of Pune were done from Mumbai airport which has good connectivity to UK and European destinations,” he said.
Subramanian said that “the flower exporters have no choice but to grin and bear the high freight costs and lower margins”. He said that with the competition from Kenya and Ethiopia for intermediate roses, the selling price of red roses cannot increase in the European and UK markets. To top it all, the buying costs have increased due to high prices in the local market and the resulting double whammy has reduced margins and returns for the exporters. Unfortunately, he said, no help has come from the government or other public sector bodies and exporters have been left to fend for themselves.
Flower growers have been saved, thanks to domestic demand. Praveen Sharma, President, Indian Society of Floriculture Professionals (IFSP), was optimistic when he said that “after all the setbacks that Indian floriculture suffered in past two years, there was a ray of hope, in the coming Valentine season”. Over the last few months, the Indian domestic flower market has been “on the bull run, thanks to the 2.5 million (25 lakh) weddings across the country in a month that started on November 14 last year”. There were around 0.11 million (1.1 lakh) weddings in Mumbai alone that month. Rose prices were unprecedented in the month of November, in the Indian market, and a flower bunch went for as high as $ 5.30 (Rs.400) – the usual price is $1.30 to $1.90 (Rs 100 to Rs 140/bunch) a bunch.
Sharma said that every year flower growers prepare special production flushes for the Valentine Season, but this year that was not the case. The continued wedding season and better prices, since November, forced growers to take up regular production, instead of special flushes for the Valentine season.
- Domestic demand saved flower growers. Praveen Sharma, President, Indian Society of Floriculture Professionals (IFSP), was optimistic when he said that “after all the setbacks that Indian floriculture suffered in past two years, there was a ray of hope, in the coming Valentine season”
- 5 million (25 lakh) weddings across the country in a month that started on November 14 last year put the Indian domestic flower market on the bull run
- There were around 0.11 million (1.1 lakh) weddings in Mumbai alone that month.
- Rose prices were unprecedented in the month of November, in the Indian market, and a flower bunch went for as high as $ 5.30 (Rs.400) – the usual price is $1.30 to $1.90 (Rs 100 to Rs 140/bunch) a bunch
Sharma said that “exports from India were bound to decline this Valentine season, mainly due to better prices in the domestic market. Exporters faced huge demand but due to the hike in freight charges from the normal $1.90 to $2.65 (Rs.150 to Rs 200/kg) to $5.30 (Rs 400) and $6.25 (Rs 500/kg) to European destinations. Exports have declined drastically in the last three years from Rs 57 crores, (Rs 1 crore is $1,32,371.40) to a mere Rs 27 crores in 2021, and this year we are expecting this to fall further in the range of Rs 18 to Rs 20 crores, said Sharma.
Iris Biotech Director Kopuru was equally hopeful about the domestic market that he said had been of great help after the first Covid wave. He said that if the government wanted to help the farmers, it can definitely bring in some form of scheme to handle perishable cargo in the special Krishi Udan (agri produce flights) which will help to increase the income of the farmers.