The Hindu Business Line : Rains, freight costs hit cut-flower exports

Though no official estimates from South India Floriculture Association (SIFA) were available, a few exporters whom Business Line spoke to said the export season was largely sluggish owing to decline in output due to adverse weather conditions and also due to the steep hike in freight costs.

Moreover, the quality of flowers was also affected due to excessive rains this year, they added.

Several of the exporters saw a decline of up to 50 per cent in their exports this season, while a few registered a growth of close to 300 per cent. Apart from Valentine's Day, Christmas and New Year is one of the biggest seasons for floriculture industry, which is largely driven by sentiments.

"With Christmas turning out to be a dull season, we now hope to catch up for the Valentine's," an exporter said.

Industry sources estimate that there could be 30-40 per cent drop in the output of cut flowers like roses this year. Roses grown in the open fields were almost washed out due to excessive rains, said a grower-cum-exporter. This has reduced the availability in the local market thereby pushing up the prices, which were ruling around Rs 4-4.50 a stem for the past couple of weeks as compared to Rs 1.50-2 a stem till mid-November.

"The high prices in domestic markets has created a bit of dilemma among exporters," said Mr Ramakrishna Karuturi, Managing Director of Karuturi Networks. With these high prices, the net realisations from the domestic sales are almost same or marginally lower compared to the net export earnings as freight costs account for almost 90 per cent of the total export earnings, he said.

Freight costs, driven by the spurt in global oil prices, have increased by about 300 per cent in past three years to around $2.4 a kg now compared with 60 cents in 2002, exporters said.

Karuturi has seen its exports increase by 200-300 per cent this Christmas and New Year season, Mr Ramakrishna said. "We exported about 1.5 million stems this time compared with about 500,000 stems last year," he added. The company exported around 5 million stems from its Ethiopian operations. Karuturi, Mr Ramakrishna said, recently bagged a major order from Morrisons, a UK supermarket chain to supply a million roses for 52 weeks. "We have started shipments from December 17," Mr Ramakrishna said, adding that the company would hire a couple of charters in January to service the orders. Karuturi is relying both on its India and Ethiopian operations to cater to this order.

According to the Agriculture and Processed Food Products' Export Development Authority (Apeda), floriculture exports for April-September period were up by 3 per cent at Rs 108.68 crore compared with Rs 105.44 crore in the same period last year. In dollar terms, the growth was about seven per cent at $24.93 million ($23.28 million).

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