Update: How the floral industry is affected by the war in Ukraine

Ecuadorian flowers expected to flood the US market

In this article, we report on how the war in Ukraine is affecting the exports and growers out of Ecuador.

With many flowers going to Eastern Europe for Women's Day (March 8), demand stopping in Ukraine and slowing down in Russia is a major hit for Ecuadorian growers, explains Luis Cadavid of Flowers House Group. Also shipping the flowers and receiving the payments of the many flowers that have already been shipped is difficult, he says. On top of that, he also sees prices and demand going down in the US.  


Luis Cadavid at the Horiflorexpo IPM Shanghai.

Russia and Ukraine – important markets
Eastern Europe is a major export market for Ecuadorian growers. "The last estimates I saw is that around 35-45% of the production in Ecuador goes to Russia its sphere of influence." For Women's Day, this an important floral holiday in this market. "However, Ecuador exports much more to Russia than statistics say, given that we send through the Netherlands, Belarus, Kazakhstan, and directly." 

Freight needs to be prepaid
The depreciation of the national currency of Ukraine and Russia is also affecting the way how freight to Russia needs to be paid. "All of a sudden, it needs to be prepaid, which is quite unrealistic as there is no clear path how to get the money out of Russia now. It limits a lot whom we can ship to if we can ship to anyone with these conditions." 

Receiving payments
“For Women’s Day, the majority of the flowers have been shipped already to Russia”, he explains. “But with Russia being blocked from the Swift payment system, it remains a question how the flowers will be paid.” 

More flowers to the US, but prices and demand low
Cadavid expects that there is going to be a major shift to the US, "meaning that we as Ecuadorian growers will flood that market, that cannot cope with so much supply. Prices went down already by 25-30% because of the increase in supply. Furthermore, we have noticed the demand in the US slowing.”

 


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