Friday, October 29, 2010
Wednesday, October 27, 2010
It is my own opinion that, if we truly wish to stimulate the sale of cut flowers in this country, more poeple need to experience the awe-inspiring event of peonies opening. More destruction has been done by the awful carnation, pom-pom, alstro, gyp flower glomerates that are embalmed in cellophane sleeves than any other cause. If you do not see the hand of God when you stop to buy some flowers, then, really, what is the point?
"Beauty is one of the rare things that do not lead to doubt of God."
- Jean Anouilh
Posted by Mayesh International at 9:38 AM
Tuesday, October 26, 2010
Wednesday, October 20, 2010
Monday, October 18, 2010
Access to Capital
As outlined above, the Dollar-Colombian Peso exchange rate has had a negative effect on the flower producers’ ability to be profitable, as the monthly difference cut into their bottom line. The solid, well financed farms with good cash-flow and aggressive marketing strategies (and of which there are relatively few) have sought to offset the downside of trade with the USA by finding new partners in Europe, Russia and Japan.
Also note that as the Australian Dollar, the New Zealand Dollar and the Euro all get stronger, we import less from those countries, which puts even more pressure on the available supply of more affordable imports from South America as well as that of domestic production.
Mass Market Contracts
Most supermarkets, big box stores and on-line fulfillment operators negotiate flower prices and quantities anywhere from 3 months to one year in advance. The buyers drive very hard negotiations predicated on large volumes, and they expect the vendors to fulfill their end of the deal. Many of these agreements are in fact encapsulated in legal documents that have provisions for stiff financial penalties if orders are not fulfilled. At present, there is a distinct push from the bouquet makers to locate products that fit into the parameters outlined by their mass market clients as well the price points. At present, it seems that there is enormous pressure on many bouquet makers to fulfill the contracts and remain profitable. Recently a large provider in Miami, Superior Floral, simply had to close the doors as they were unable to turn a profit. I suspect that larger players are keeping their clients happy until it comes time to renegotiate prices. And prices will have to go up. The growers will insist on this, particularly as there are now other options available to them. Furthermore, the amount of legitimate plantations that can fulfill orders to the customers’ expectations in terms of volume and quality is also shrinking.
Increased Worldwide Demand
As recently as seven years ago the USA used to absorb about 60% of the rose production of Ecuador and from Colombia a figure in the region of 90%. In 2010 through August USA received about 32% of the rose production in tons from Ecuador, although this was valued at 29% in dollar value. Russia has purchased a little over 18% in the same period, a quantity which has almost doubled since 2007.
Colombia is actively soliciting offers from Europe and Russia, and although they are now shipping many carnations to other countries, they have been less successful with roses due to quality issues. On the whole most of the rose production from Colombia is still shipped to the USA, but a larger percentage is going to the mass markets.
France, Italy, Ukraine, Canada, Germany, Switzerland and Japan are starting to import more and more roses from Ecuador, and these countries are atop a list of some 50 countries bringing in 10,000 tons or more.
This strategy of diversification is a sound one and ensures better returns for the farms, but it does mean that in the global marketplace the probability that flowers may go to other parts of the world is increasing, and in the nature of capitalism the better roses and hot varieties tend to be siphoned off to the highest bidder.
It should also be noted that Russia tends to have a group of varieties that only appeal to them, which may be generalized as having long stems, large heads and gaudy tow-tone colorations. The fact that some growers are allocating large chunks of their farms to growing these varieties, and harvesting them in a completely different way means that less acreage is available for the USA and other markets.
Any one of these categories on its own would constrict the rose supply, but when one considers that a combination of all these things is now occurring the result is clearly a substantially impaired rose supply. The fact that the rose supply is now possibly less than demand for the first time in twenty years must inevitably lead to increased prices.
It is also becoming patently clear that as the top tier of thirty or so farms in Ecuador start to leave the other farms behind (in terms of product composition, high quality standards and marketing integrity), and find that the demand for their exclusive, newer varieties and higher quality continues to sell out; that they can raise their prices and sell to the highest bidder. With the internet, this means it could be a buyer in Kazakhstan, South Korea or Canada!
This also encourages the second class farms to raise their prices, since for many rose buyers they represent the only chance to procure substantial quantities of product, being shut-out of the top tier. These farms are able to successfully raise prices because of the comparative nature of our business.
And likewise the lower class of farms can ask prices for product that is marginal.
Posted by Mayesh International at 4:18 PM
Monday, October 11, 2010
Friday, October 8, 2010
It seems of late that many of our more progressive designers are requesting the most subtle and sophisticated roses in the marketplace. "Combo, Quicksand and if you can't find those sub with Camel or Sahara" are the cries we hear.
It demonstrates just how thin the line between the sublime and the ridiculous (the f'shizzle and the fugly) is.
A few more things that make this rose a candidate for the supermarkets is that once the guard petals are removed the color becomes a distinctly bland pink. And quite a few guard petals had to be removed as this variety does not sustain the stress of handling and shipping well.
Two thumbs down for Tamara.
Posted by Mayesh International at 1:28 PM