The impact of COVID-19 on the flower industry is serious. Flower exports from Colombia and Ecuador decreased by 80% and are expected to be 100% in the coming week. In Europe, several garden centers are forced to close their doors, but fortunately there are still points where flowers and plants can be sold. Also online flower sales still seem to be allowed to continue in many countries.
This was mentioned in an update of Ministry of Agriculture, Nature and Food Quality (LNV) of March 23, shared by Royal FloraHolland. In this report, the impact of COVID-19 on the export of flowers and plants, as well as other perishables, on the horticulture industry in several countries around the world was presented.
Of course, the situation in each country are subject to change, but below the update of 23 March 2020:
Colombia and Ecuador
In Colombia to date 231 people have been infected with Covid-19 and 2 dead. Bogotá, the capital has 40% of the cases; 60% of the flower production takes place in the savannah of Bogotá. From Wednesday the 24th of March there is a lock down in Colombia, for the time being until the 13th of April (just after semana santa, where normally everyone travels). Essential services will continue (also sea freight). Ecuador today has 789 infected and 14 dead, Guayaquil has 45% of the cases followed by Pichincha, one of the most important flower production regions near Quito.
Colombia and Ecuador have declared a state of emergency and started a nationwide quarantine. There are travel restrictions and airports have been closed to all international passenger flights. Freight flights are still allowed, but due to low demand we expect more cancellations until mid-April or further notice. Most airlines to the US and Europe stop such as KLM, Lufthansa, Iberia, American, United, Delta and only a few are available in Cargolux, Emirates, Turkish Latam. Exports of flowers have decreased by 80% and are expected to be 100% in the coming week, so all markets are closing and customers will stop all remaining orders from all markets. Many growers have decided to stop exporting for at least twenty days from now and are sending most of the workers home. All harvested flowers will be destroyed and used for composting.
Video shared by Ecuadorian export association Expoflores to support the flower industry and show the importance.
The economic consequences for the industry will be enormous. The governments of Colombia and Ecuador will take measures for companies to postpone tax payments and promote credit lines over the next two months for those faced with credit payments and give them debt relief and allow them to keep their salaries and protect jobs. Colombia has announced a USD 3.6 billion package to be spent on emergency measures, starting with health and social care programmes. The economic situation in Ecuador is different and so far we have heard from Expoflores that there is no money available to support the industry in such a crisis. Growers are asking the government to allow 90 days of leave for workers who are not needed in time.
Garden centres in Belgium may only sell food and animal feed. AVBS is negotiating a relaxation, but for the time being without result. Supermarkets are still selling flowers and plants.
Some flower shops sell 'at the door' takeaway restaurants. Many shops are effectively closed. There are growers, however, because the need is high, who display products on the street with a guide price, some Corona guidelines and a pot for the honest payer next door.
Selling and delivering flowers and plants online is still allowed but is not recommended, also for flower shops to do so because flowers and plants are not among the extremely necessary products.
Points of sale for flowers and plants can remain open. This means that, in addition to supermarkets of course, DIY stores, garden centres and (again) florists may also be open. However, they must adhere to the very, very strict requirements with regard to 'social distancing'. Also in North Rhine-Westphalia, the most important market for flowers and plants, this is the policy until further notice. In Bavaria, stricter rules have applied since Saturday, which most other Bundesländer have not yet opted for.
Last night, the copper stand of Veiling Rhein-Maas (VRM) was 'converted' to the new requirements. Of the 600 seats, 155 can still be used. Of course, VRM is also investing heavily in more purchasing via Remote Buying (KOA).
Trade with China seems to be picking up again. Seed companies are blocked in many Southeast Asian countries and are seeking dialogue with governments to propose "Green Lane" solutions. Dept. of Agriculture in Myanmar promised to further facilitate the import of plant propagation material from NL for 15 new groups of plants, flowers and fruit.
Fairs, shows and events are cancelled, now until late June. The famous Chelsea Flower Show (19-23 May) wants to develop a virtual alternative.
FPC, the trade association for the trade in fruit, vegetables and floriculture products, advocates (once again) temporary "light-touch, risk-based" plant health inspections for imports. The reason for the request is that shipments of perishable products are delayed on their journey to the United Kingdom due to lockdowns and staff shortages elsewhere. After-sending original certificates also fail to find their way to their final destination, or do so too late. FPC wants the requirement to produce original certificates (direct or after-shipment) to lapse, so that more consignments can be released immediately at the border.
Due to long queues at the borders of Poland, additional borders have been opened for people and freight traffic. The Polish CVO has advised not to export live cattle to Poland at the moment as long as the situation at the borders is unclear. Following the closing of the Schengen border for non-Schengen nationalities, the Polish agribusiness once again called for the possibility of work visas for Ukrainians. Flowers are in the last place on the shopping list these days. Also other events such as weddings or corporate events that would normally be decorated will not take place. The Polish Association of Florists has addressed a petition to the Polish Prime Minister with a call for support (e.g. exemption of insurance contribution and VAT exemption). Otherwise several flower shops will go bankrupt in Poland. The Polish horticultural sector is concerned about the availability of the products imported from abroad. They think mainly of fertilizers, seeds and crop protection products. The flow of goods across the border is already more difficult, trucks are waiting in traffic jams for several hours. Delays in deliveries are also the result of the often reduced number of employees in supplier warehouses. Polish producers are also concerned about future prices of imported fertilisers, as the price will be influenced by the zloty exchange rate.
On the 22nd, 23rd and 25th of March there will still be KLM flights to Kampala. After that, it is unclear whether there will be any more flights, and whether flowers and cuttings can still leave the country.
Cattle futures in the US have fallen by almost a quarter since 1 January 2020. This is partly due to the coronavirus but the market opening for beef from Brazil has also contributed to this. The problem does not seem to be demand, shelves in many shops are empty, but to get it to the consumer on time.
On March 22, countries in the CEFTA region together with the European Union and the Transport Community discussed the construction of a green corridor with priority lanes for trucks transporting food, raw materials for the food industry, medical equipment and materials in the CEFTA region (Albania, Bosnia and Herzegovina, Moldova, Montenegro, North Macedonia, Serbia and Kosovo). The green corridor should allow a smooth flow of goods inside and outside the region.The main problem for the companies is the transport, i.e. the epidemiological conditions to be met by drivers entering and leaving countries from crisis areas. To date, four out of the six economies of the Western Balkans have declared a state of emergency.
To the best of our knowledge, there are no barriers, including those relating to road transport. As far as the latter is concerned, Austria had taken some measures but withdrawn them until 29 March, and Slovenia remains a problematic border (road transport is only allowed to pass through the country from border to border and provided there is sufficient fuel without having to stop). There are also routine checks and the temperature of lorry drivers is measured (causing delays).
From Tuesday 17 March (00 hours CET) there will be passport controls at Spanish border crossings. Apart from these checks, there are no restrictions on the logistic routes to and from Spain. Goods and in particular food transport are allowed in and out of the country.
The Abe government decides not to extend the national school closures and leaves this to local authorities. As a result, schools in low-risk areas will reopen on 6/7 April. Japan seems to have Corona virus carefully under control - although experts warn that steady expansion is still possible.
The authorities have announced that they will continue to guarantee the smooth import of goods via air, water and land to ensure that the supply in Saudi Arabia remains on arrow. As a result, the various hypermarkets and supermarkets still have more than enough products in stock, including fresh products.
United Arab Emirates
As a result of the complete disappearance of the tourist industry and the congresses and fairs industry, the demand for food and other products has fallen sharply. This, combined with the fact that transport flows are stalling due to the limited available transport capacity, resulting in higher prices, has led to a sharp drop in imports.
On March 22, there was uncertainty about transport to France. The Agriculture Council reports that two drivers are allowed in the cabin and that a health certificate is not required. If they have such a certificate, that's better. France has a similar regulation as the Netherlands for optimal traffic flow and supplies.
From Saturday March 21, the border between Mexico and the US will be closed for non-essential traffic. This does not include trade in agricultural and food goods. Mexico exports over $11 billion worth of fresh fruit and vegetables to the U.S. annually. The declining peso (against the USD) makes the export of vegetables to the US more attractive.
On March 20 Romania officially requested the Hungarian authorities to open 3 additional border crossings at Borș, Cenad and Nădlac 1 for hauliers to or from Romania. Including the already open border crossing point Nădlac 2, the total number of crossing points that can be crossed would be 4. Blockades Hungarian - Romanian border: the Romanian authorities have asked Hungary to increase the number of crossing points at Bors, Cenad and Nădlac. There is now 1 crossing and this leads to many problems (waiting times and blockades). Also border workers from both countries get into problems. On 19 April the Romanian Easter celebration starts (one week later than in the Netherlands). President Iohannis has publicly asked the Romanian diaspora (more than four million people in total) not to travel to Romania.
The Federal Veterinary and Phytosanitary Surveillance Service (Rosselkhoznadzor) simplifies the procedure for processing batches of animal and plant products imported into Russia in order to avoid disruption of the supply of plant and animal products. The registration of goods controlled by Rosselkhoznadzor is carried out on the basis of copies of veterinary and phytosanitary accompanying documents. All necessary measures to confirm the authenticity of these documents will be taken together with the competent services of other countries.
The government of Georgia claims that there are no shortages of basic food products as a result of the Corona events. Thus, there would be sufficient supplies for 3 to 4 months. No measures are expected to prevent imports.
Georgia's three largest canneries also ensure a stable supply of food products and local fruit and vegetable production, which is now on the rise, is expected to increase further in the coming months.
The bakery sector and canned food companies indicate a 60% increase in sales of canned food. They indicate a shortage of personnel. Currently, there is a 10-20% reduction in the labour force at work. If more people become infected there is a threat of a shortage of 3,000 workers. In the meantime, the Ministry of Agriculture indicates that there is no reason to panic because there are sufficient stocks in the warehouses. This is confirmed by the logistics sector. Supermarkets are also running out of staff, including Tesco. At the same time, smaller companies are being hit by the crisis.
The American food sector including USA Rice and the North American Meat Institute indicate that there are no food shortages and that there is sufficient food in storage. Also, the border with Mexico is still open for the supply of fresh fruit and vegetables. Large supermarket chains such as Walmart, Kroger and HEB have reduced store opening hours to allow employees to refill the shelves. In addition, a number of chains offer separate opening hours in the morning for senior citizens. Amazon has indicated that it will hire 100,000 people to meet their customers' increasing demand for household goods and food. With the closure of U.S. Consulate General in Mexico, applications for temporary worker visas (so-called H2A visas) for the agricultural sector also ran a risk. The American Minister of Agriculture, Sonny Perdue, is in contact with the US Department of State to limit the disruption of visa applications as much as possible. The American agricultural sector has responded gratefully.
Ukraine has ceased international passenger transportation since March 17. Local intercity transport stopped on 18 March. The metro in major cities is closed, other means of transport are strictly limited, shopping malls and cinemas are closed. The evacuation of Ukrainians from abroad continues. On 17 March, 3,500 Ukrainians crossed the border with Poland via three open points. Agreement has been reached with Slovakia to carry out the transfer of Ukrainians. The total number of Ukrainians abroad awaiting evacuation is estimated at 35.5 thousand. Only 49 out of 219 border checkpoints are open. The waiting time for commercial goods is 20 hours at the border with Poland and less than one hour at the other border crossing points. According to customs information, all consignments are allowed for import, not stopped because of quarantine. Companies report logistical problems. The logistics of perishable goods is complicated due to long waiting times. Logistics of small goods sent by mail in passenger planes (e.g. seeds) is no longer possible, which is crucial for the start of the season.
The Hungarian measure restricting the transit of goods through a single border post with Romania (Nădlac 2) has proved to be insufficient and has caused significant bottlenecks.
The Kazakh Prime Minister has asked the Ministry of Finance to pay attention to reducing import duties on the most important staple food products. The EU delegation in the capital Nur-Sultan has asked Kazakh authorities for more information.
There have been many recent objections to the new regulations on cross-border transport in Kazakhstan. For example, the truck and driver from certain Corina high-risk countries, including the Schengen countries, should be replaced at the Kazakh border.
Friday evening March 20 was the last flight from Kigali to Amsterdam. The next 30 days the airport will be closed for passengers. Cargo flights can land, but given the high demand for cargo flights, the question is whether Rwanda can be visited. At this moment we are looking into cargo (roses and vegetables) with a truck to Nairobi.
In addition to this list, Ethiopian media agency Capital obtained from Ethiopian Horticulture Producer Exporters Association (EHPEA), that the demand and price of perishable products in Ethiopia has sharply dropped every day particularly as of the beginning of the week.
“The corona pandemic has been putting its scar on the horticulture industry in a big manner in the last days. It is expected to inflict more damage as borders are closing in the destination markets. This is inhibiting the movement of the products and also there is a sharp declining trend of demand,” Tewodros Zewdie Executive Director at EHPEA said.
He told Capital that the value of the product dived down by 82 percent due to the latest problem that happened everywhere in the world.
Borders in Europe are closed and the product cannot be transport from Holland, which is the centre of the flower market in the world, according to the Executive Directive. “The product is perishable that cannot be stored for long, due to that the product is dumped everywhere that seriously affects local producers,” he added.
Due to the case local producers’ daily sales is almost nil.
Click here to read the complete article on CapitalEthiopia.com
FloraHollands clock and direct turnover on Marh 23. 2020
Not to forget, how are things at FloraHolland? "Yesterday's (March 23) total turnover (clock and direct) amounts to 6.55 million euros. A decrease of 76.1% compared to last year (compared to Monday 25th March 2019). The daily turnover is approximately on the same level as last Wednesday, Thursday and Friday. The decrease compared to last year of the direct turnover (-72.0%) is now almost as big as the clock turnover. Last week there was still a big difference between this (-33.8% vs. 85.2%)", they reported in their market update.
"Yesterday's (March 23) clock turnover was 1.96 million euros. A decrease of 82.3% compared to last year. In total, almost 10.7 million units were supplied for the clock. Of this, 2.6% was turned (1.7% for cut flowers, 21.4% for houseplants and 5.3% for garden plants). The percentage of unsold products is therefore at a much lower level than last week. At that time it averaged 28.2%."