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Monday, Feb 03, 2003

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Rosy outlook for cut flower exports

Vishwanath Kulkarni


FOR Indian cut flower exporters, who are eagerly bracing up for Valentines Day exports, the season ahead seems to be promising this year.

A positive sentiment in the market coupled with appreciation of almost all currencies including rupee against dollar, could see Indian exporters rake in the moolah this time even as a hike in freight costs by almost 20 per cent could dent their net realisations.

Industry sources estimate that rose exports from India could be higher by about 25 per cent this Valentines. ``Production has been good this year and with a strong market demand we should be exporting more than last year,'' said Mr T. Ranga Rao, Vice-President, South India Floriculture Association, and Managing Director of Sachin Floritech. According to different estimates, India exported anywhere between 12 and 13 million rose stems last Valentines Day.

``We are almost doubling our exports this year,'' said Mr Rahul Razdan, Head of the floritech division at Manjushree Plantations Ltd, a B.K.Birla Group company.

Manjushree, which is concentrating mainly on West Asian and South-East Asian markets, has an export order book of 6.5 lakh stems this year, he said. For last Valentines, the company had exported about 3.5 lakh stems.

``We are looking at a realisation of nearly 0.9-1 euro for each standard stem of 60 cm length. Though the realisations could be higher by 10-15 per cent this year mainly due to better prices and currency appreciation against dollar, we may not be able to reap the benefits to the maximum, as the freight costs have increased to Rs 120 a kg, up from Rs 100 a kg last year,'' Mr Razdan said. Echoing similar views, a spokesperson for Sri Vasavi Florex and Industries Ltd, part of the GMR Vasavi Group, said the exporters are expecting better realisations this year as global market has picked up for cut flowers.

``We are looking at a net realisation of Rs 15-19 per stem from the Australian and European market, while it could be around Rs 10-12 per stem from Singapore,'' he said. Vasavi Florex expects to increase its shipments by more than 25 per cent this year.

``The Valentines season has started on a positive note and exporters are eagerly looking ahead to participate in the week-long Amsterdam auctions starting Monday. We hope the season will be bright one for beleaguered Indian floriculture industry this year," Mr Ranga Rao said.

Exporters from Bangalore are betting mainly on airlines like Lufthansa to ship their produce to Amsterdam through Frankfurt, while exporters from Hyderabad are pining their hopes on Emirates, Mr Ranga Rao said.

``Arranging a chartered flight, unlike last few years, may not be possible this year as exporters have diversified to various countries,'' he said. Moreover, the exporters do not have the capacity to pay upfront for the chartered flight, as last year was bad as far as realisations were concerned, he added.

``Market in the Gulf has picked up last year and we expect to do better this year despite the concerns of a possible Iraq war. Elsewhere, the Australian market has also picked up and expanding quite fast. We also expect to do better in Japan and Singapore,'' Mr Ranga Rao said.

Domestic market has also picked up and we expect the demand to grow by 10-15 per cent this year, he added.

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