IPM Essen market report
Horticultural trade follows the overall political situation
by Dr. Marianne Altmann
The characteristics of the last few years in the global trade continue to exist. The worldwide demand for flowers and plants is concentrated in the European countries, China, Japan and the USA. The Netherlands remain the undisputed number one as the hub for the trade inside the EU. They are responsible for almost 70 % of the export activities of flowers and plants inside the EU. As indicated by the latest figures from EUROSTAT, the trend towards rising imports of flowers and plants into the EU is persisting as far as both the quantity and the value are concerned.
In 2015, a total of 504,952 tonnes (+ 8.2 %) worth Euro 1.68 billion (+ 5.3 %) was imported by the EU. As in the previous years, the cut flowers which account for 78 % of the total imports into the EU are mainly responsible for the rise in the imports. At 5.3 %, their growth in terms of value exactly corresponds to the total growth. The increases in the imports may be attributed almost exclusively to the cut flowers; cut flowers are the sole driving forces behind the growth in the EU's foreign trade.
The fact that the import quantities are rising at higher percentages than the import values shows that the trend towards increasingly higher-value products in the last few years is no longer persisting. In contrast, the long-term development in the shift with regard to the countries of origin is continuing even further. With approx. 27 % of the imports, Kenya remains the undisputed number one amongst the EU's countries of origin, followed by Ethiopia, Ecuador and Colombia. As classic cut flower producers, these countries are responsible for the described increase in the EU's imports. They are consolidating their market positions as exporters to the EU even further.
In contrast, export countries such as Israel, the USA and Costa Rica are displaying a declining trend.
The EU's export values are rising - its export quantities are not
According to EUROSTAT, flowers and plants in a quantity of 664,000 tonnes and a value of Euro 1.98 billion were exported from the EU in 2015. In comparison with the previous year, that is a decline of 3.1 % as far as the quantity is concerned. The EU's exports which have exhibited an upward tendency for ten years are thus declining for the second time in succession since 2013. At the same time, it is possible to establish an increase of 5.1 % in the value which relates to all the ranges of flowers and plants. Falling export quantities with rising export values mean that increasingly higher-value products are being exported by the EU's member states.
Trade surplus continues to exist
In spite of the EU's increased imports of cut flowers and thus the repeated extension of the negative balance of trade in the segments of the cut flowers and the cut foliage (in 2015: approx. Euro 620 million / in 2014: approx. Euro 500 million), the EU's balance of trade turns out to be positive. The overall consideration shows a trade surplus amounting to approx. Euro 300 million in the case of flowers and plants. The trade surplus has now been detectable since 2002 and may primarily be attributed to the exports of flower bulbs and tubers from the EU.
Target markets of the EU's exports only with slight alterations
At first glance, the target markets of the EU's exports turn out to be similar to those in the past. Russia and Switzerland remain the countries with by far the strongest demand for European flowers and ornamental plants. In 2015, the EU exported, in each case, 20.5 % of the export value to Russia (compared with 21.3 % in 2014) and to Switzerland (compared with 20.7 % in 2014), followed by the export markets of the USA (11.2 %), Norway (8.2 %) and China (5.9 %). At second glance, it is conspicuous that the declines in the exports to Russia are being compensated for by the growth of the other target markets. This means that the EU's member states are extending their core export markets even further. At present, the individual exporting countries in the EU are making correspondingly intensive efforts to gain footholds in countries which they have neglected in the past. For example, countries such as Turkey, Ukraine, the United Arab Emirates or also Japan are being courted to an increasing extent. Federal Minister of Agriculture Schmidt recently stressed that Germany's close partnership with Turkey in the agricultural field would be continued while Dutch firms at Flower Expo Ukraine 2016 affirmed that they wanted to strengthen their cooperation with Ukraine. With the exception of Ukraine, it is possible to establish slight rises of up to 1 % with regard to all the target markets of the EU's exports. The ranking of the different target markets in relation to the sales value thus remains constant.
Two discussion subjects are dominating 2016
The EU's rising imports and exports of flowers and plants are an indication of stable to increasing trade in the sector. Precisely the export values not only of the Dutch but also in Germany are exhibiting record values and might ensure an optimistic outlook in the sector. For example, the positive development of the Dutch exports is persisting in the autumn of 2016, too, after 2015 had already yielded a record export value of Euro 5.6 billion in total. Nevertheless, uncertainty is spreading around the European market in 2016. "Brexit" and "Russia" are the central subjects in this respect.
Read the full report here.