The Christmas/New Year season is seen bringing no cheer for the floriculture sector as a levy of 18% GST, a hike in freight rates amid the withdrawal of freight subsidy has squeezed the margins, exporters said.

“The levy of 18 per cent GST in the recent months is the biggest drawback for a floriculture exporter,” said Shrikanth Bolla, President, the Growers Flower Council of India. The Government has discontinued the 18% GST exemption on air freight from October 1, 2022.

Bolla said the international freight rates are up by about 200 per cent from the Covid times and now there’s a GST levy. Also, the input subsidy of 40 per cent offered by APEDA on air freight has been withdrawn. With no increase in the consumer price of flowers, farmers’ margins have been taken away by higher freight and the GST, said Bolla, who is also the director of South India Floriculture Association (SIFA).

Very few shipments

For the events-driven floriculture sector, Christmas/New Year is one of the seasons for exports, while the shipments are at a peak during the Valentine’s Day.

“If the international buyers enhance the purchase price then the farmers might do some exports Otherwise the floriculture exports may be difficult. There are very few exports are happening now. If you compare with the earlier years’ Christmas/New Year season, this year the shipments are very few,” Bolla said, adding that the prevailing global recession has not had much impact, while rise in transportation costs has hit margins.

Some exporters, who are able to get a better price, are shipping the flowers but volumes are not there, he said. As a result, the growers are looking at more of the domestic market. “The wedding season is on while clarity on the orders for Valentine’s Day will be known by mid-January,” he said.

Exports down 8% in value

As per APEDA data, the exports of floriculture including dry flowers and cut flowers during April-October 2022-23 were down by 8 per cent at $55 million from $60 million a year ago. In rupee terms, exports stood at Rs 433 crore for the period, down two per cent from Rs 443 crore last year. However, in volume terms, shipments were up 1 per cent at 13426 tonnes during April-Oct 2022-23 as compared with 13,253 tonnes in the same period last year.

Further, the cut flower growers are faced with an increase in input costs amidst challenges such as freak weather patterns. “Costs of all inputs such as fertilisers, pesticides, polythene sheet and greenhouses have gone up by 30-40 per cent over the previous year, adding to the burden of the grower. Also due to the excess rains, there have been a lot of damages while pest management has been a problem to growers this year,” Bolla said.

The United Kingdom, the United States, the Netherlands and the United Arab Emirates are among the major destinations for Indian floriculture exports.

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