Financial Daily from THE HINDU group of publications
Tuesday, Feb 10, 2004
Financial Daily from THE HINDU group of publications Tuesday, Feb 10, 2004 |
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Agri-Biz & Commodities
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Horticulture/Fruits & Vegetables Industry & Economy - Exports & Imports Weekend Valentine's wilts rose exports — But ducks Dutch auctions to bloom `direct' on foreign shelves Vishwanath Kulkarni
Bangalore , Feb. 9 A WEEKEND Valentine's Day has taken the sheen off Indian rose exports as sales plummeted by as much as 34 per cent even as local firms have managed to beach-head directly into top retail chains, such as Sainsbury, Tesco and Wal-Mart subsidiary ASDA, circumventing the Dutch auction route. Traditionally, Indian rose stem exports found their way to the retail giants' shelves through the circuitous Dutch auction route. This year, UK super stores directly procured flowers from Indian growers, which, in turn, helped the retailers cut cost and give greater visibility to the Indian exporters. Supermarket giants Sainsbury, Tesco and ASDA have bought close to 700,000 stems from the Bangalore-based Karuturi Floritech this year. "We have gained a toe-hold in the supermarket segment for which we have been working for all these seven years," said Mr K.S. Ramakrishna, Managing Director, Karuturi Floritech. "This is just a precursor of things to come," he added. However, retail giant Marks & Spencer is yet to look at India to source such stems for V-Day sales. Flowers shipped through the Bangalore Air Cargo Complex till February 8 stood at 137 tonnes as against 207 tonnes in February last year. "Exports could have been much better if Valentine's had come on some working day," said Mr Nadeem Ahmad, President of the South India Floriculture Association (SIFA), adding that last minute orders were still trickling in. Exporters said since most of the offices in the Europe and the Australia stay closed on weekends, a huge market of working professionals gifting flowers to colleagues in offices stands untapped this year. "We have to take such hit once in five years as V-day falls on Saturday this year, which also happens to be a leap year," Mr Ramakrishna said. However, "We expect to make up for this year's shortfall next year as Valentine's Day 2005 falls on Monday," he added. "Direct selling assures the growers of a fixed price for their produce unlike the auction system where the uncertainty in getting fair realisations is high," Mr Ahmad said. The direct selling has translated into fair realisations for the Indian growers. "Although we have taken a hit of 20 per cent by selling directly to supermarket chains, the net impact has been lower, buoyed by a strong sterling pound. The net realisation per stem is in the region of Rs 20," said Mr Ramakrishna. Mr Ahmad is a bit conservative and estimates that the average net realisation is to the tune of Rs 10 per stem.
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