Royal FloraHolland: "Supply down 70%, prices down 20%"

Last Monday, on the clocks, a slight improvement could be noticed. The total (clock + direct) turnover was 8.47 million euros, a decrease of 60.6 percent compared to last year (Monday April 1, 2019). The total turnover is on the highest level since Tuesday 18th March.

The clock turnover of Monday March 30 was 3.15 million. A total of more than 13.7 million units have been supplied for the clock. Of today's supply 0.9% has been turned around (0.9% for cut flowers, 2.8% for houseplants and 0.1% for garden plants). The destroy percentage is therefore at its lowest level since the outbreak of the corona crisis.

Supply percentages increased
Because the auction assumes that trade will not recover to normal levels in the coming months, a supply regulation has been drawn up that can evolve in line with the development of demand per product group. Every day they monitor which and how many flowers and plants may be supplied on the basis of the average price, the destroy percentages and the market situation. As a result of the increased prices and the reduced destruction, the supply percentages per product have been increased again on Monday. Special circumstances are also taken into account, such as the exclusivity of products, specific location conditions or colours (i.e. yellow for Easter).

Royal FloraHolland's supply regulation is a temporary emergency measure to keep the destruction of flowers and plants to a minimum and to restore price formation.

Update minimum prices
Due to current market conditions, the minimum prices for a number of product groups have been adjusted for Lisianthus, Cut hyacinth, Gerbera, Freesia, Cymbidium and Pot-phaleanopsis. This change was successfully implemented last Friday (27th March) and on Monday (30th March).

"We are adhering as much as possible to the existing regulations and are taking into account as much as possible the advice of our auctioneers and that of the FPCs. The increases are of a temporary nature and are related to the consequences of the corona crisis. Auctioneers keep in contact with the relevant FPCs about the effect of the increases. If further adjustments to minimum prices and supply percentages are necessary, we will coordinate this in the first instance with the FPC chairmen."

The auction's CEO Steven van Schilfgaarde was present at a Dutch radio broadcast yesterday to explain the situation. In som, he explains that the auction is down 70% than usual, regarding the products. The rooms are currently parking spots for the trolleys and buckets. Prices are about 20% lower than usual, so that is fairly OK. Supplying more products for lower prices and therefore trying to sell higher volumes isn't possible as that will cost the chain more than it will cost more than it yields. The compensation measures that have been undertaken are good and are definitely compensating the labor costs, but are far from sufficient as the labor costs are just a small part of the total costs of a grower. An emergency fund is necessary and needs to come quickly. Saving companies now is guaranteeing the tax revenues of tomorrow. And later, they will try to start and pick up speed as fast as possible. Production needs to be there, some stock and increasing supply on the short term. They are elaborating the scenarios of the market situation of tomorrow. 

Click here for the interview (In Dutch and from minute 2 till minute 10)

Click here more market information regarding Royal FloraHolland.  

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