Roses are red, that bit is true, but violets are purple and not blue, however more importantly the South African cut-flower industry needs you!
Roses are red, that bit is true, but violets are purple and not blue, however more importantly the South African cut-flower industry needs you!
The year 2012 marked an average 10.3% growth rate in global exports in the floriculture industry. It is an immensely dynamic industry due to the variety of flower types, arrangements, production techniques – which includes growing the flowers (horticulture), and retailing arrangements.
The international market consists mostly of established competitors in Europe. Countries that are geographically farther away like South Africa have high fixed costs associated with the airfreight charges because of the perishable and delicate nature of flowers.
Germany is the main market for imports, whilst the Netherlands is the world's leading exporter, conducting more than 60% of the international trade in cut flowers through its flower auctions. Interestingly, roses are the main traded product. The industry consists of three major agents: the growers, the wholesalers and the retailers.
Alsmeer (Netherlands) in the past has been a major outlet for South African products. Consequently, South African outlets’ competitive trading advantage becomes obsolete due to the international boundary that exists and thus growers are unable to develop any direct relationship with the major European wholesalers. This results in a poor marketing strategy whereby prices are determined at the auction. South African growers make a substantial loss as the realised auction price for their product, in some situations, does not even cover their airfreight costs.
In terms of cut-flower exports, South Africa is performing marginally. It ranks number 17 out of 20 countries. However, the high demand for South African flowers experienced in many international markets provides a sound basis for their expanding international trade.
Studies show that flower production plays a surprisingly significant role in the South African economy. It is one of the most efficient contributors to development and growth in the economy. Thus the industry has the potential to make a major contribution to economic growth and more importantly redistribution and development in South Africa, consequently meeting the country’s needs of efficiency and equity.
